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This is question that I receive a lot. Debt collectors are fond of calling people at their job. And the reason why is simple: when the collector calls your place of employment, they know that you could get into hot water as a result; at the very least, you will likely feel embarrassment. So the incentive behind calling you there is not so much to track you down and let you know how much you owe a debt. Rather, it is to try and humiliate you.

The body of law that covers this particular area is called the Fair Debt Collection Practices Act (FDCPA). This federal statute regulates what a collection agency can and can’t do in their attempts to collect on a debt. For instance, federal law makes it a violation if the debt collector is calling you on your cell phone; or if they leave threatening messages; or they do not identify themselves as a collector; or if they continuously call your friends and family members; or if they call your home phone continuously throughout the day; and in some cases, if they call your work.

The law basically states that the collector has ‘one free shot’ to determine your location or whereabouts by way of a call to your job. So if in fact the collection agency has no idea where you are, but they do have access to your work number, then they can give that number a call. But if they do this, the debt collector still has to play by the rules governed by federal law. As such, the collector is not at liberty to announce itself as a debt collection agency to the person who answers the phone. They may ask to speak to the person they are trying to reach, but they may not provide specific details as to why they are calling (in other words, if the secretary answers the phone, the collector can’t dive right in about you and the debts that you owe).

No, it most certainly cannot. But that doesn’t mean that it won’t try and use those tactics when trying to collect. Very often, the debt collector will say (either verbally, or in written communication) that it a representative of the US government, and acting under the authority of the Constitution. These threats can be intimidating and/or stressful, but that is exactly why these particular threats are used. Fortunately, they are not only illegal, but more importantly, laughable.

The area of law that covers what a collection agency can and can’t do in their attempts to collect on a debt is the Fair Debt Collection Practices Act (FDCPA). 15 U.S.C. 1692e (§807(9)) states as follows: A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt…the following conduct is a violation of this section – (9) The use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval.

In other words, if you are debt collector, and you are trying to persuade someone to pay on their debt, you can’t tell that person that you are an official from the FBI and that if the person doesn’t pay tomorrow, they are going to be arrested (unfortunately, I have heard this very story several times from many of my clients). This threat is obviously a misrepresentation (the debt collector on the phone is most certainly not an agent from the Federal Bureau of Investigation). And the only proper reaction to a phone call like this is to laugh. After a hearty laugh at the absurdity of having received this type of call, you should then realize that since the collector has just violated federal law, he/she should be held accountable for doing so.

Yes, this is a possibility. There are certain debts that are described as ‘non-dischargeable,’ and therefore cannot be eliminated in the traditional way in which other debts are knocked out. But whether or not these debts are dischargeable depends on very specific rules.

The list of typical debts that are non-dischargeable are as follows: tax debt, back child support, student loans, debts that were assigned to you by way of a divorce decree, and debts that were incurred fraudulently. Let’s look at each in turn: Tax debt is typically a non-dischargeable debt because it is a debt owed to the government (and therefore theoretically owed to society at-large). This would include income tax, personal property tax, real estate tax, and sales tax. However, there is a ‘loop hole’ to this general rule: if the income tax debt is more than three years old, was filed timely, and the original return was not filed fraudulently, then there is a possibility of discharging this particular income tax debt.

Back child support can never be discharged in a bankruptcy. Student loans are very rarely dischargeable, again because it is a debt owed (normally) to the government, and unless you are terminally ill there is a very small chance that you can get this type of debt discharged. Debts that you pick up by way of a divorce (like a joint credit card that the judge orders you to pay) cannot be discharged in a St. Louis Chapter 7 bankruptcy, but can be discharged in a St. Louis Chapter 13 bankruptcy (because of the so-called ‘super discharge’ feature of that type of Missouri bankruptcy). But debts that were created by way of fraud can never be discharged in a bankruptcy. Typical examples of this would include using a false social security number, misrepresenting your financial standing, or using the identity of someone else (either through banking information, credit numbers, or personal data).

The answer to this question depends upon a number of different factors. Sometimes it has to do with things that are outside your control (such as statutory rules), and sometimes it has to do with what is in your best interest. Either way, there are pros and cons for each chapter of bankruptcy.

The main reason why someone would be a good candidate for a St. Louis Chapter 13 bankruptcy is if their home is about to be foreclosed upon. When you fall behind on your mortgage payments, and the bank or lending institution seeks to foreclose on the loan, filing a Missouri bankruptcy will stop the sale of the house. Once the Chapter 13 is filed, a repayment plan is created in which you can get caught up on the arrearage (and keep the home safe). This allows you to spread the amount owed out over a period of three to four years.

Another reason why someone may wish to file a Chapter 13 is if they want to strip a second mortgage off of their house. Such a thing can be done in a 13 (but not a Chapter 7). So long as the fair market value of the home is less than the primary (or first) mortgage, then the junior lien holder can be stripped out. In doing so, you can potentially knock out tens of thousands of dollars on the overall amount owed on the house. Another scenario that makes a Chapter 13 attractive is that it allows you to pay off a car at a much lower interest rate than most people are dealing with; and, depending how long ago you purchased the automobile, it is also possible to pay the automobile off at the current fair market value as opposed to the balance of the actual loan. This is a possibility if the car was purchased 910 days or more before filing (which works out to be about two and a half years). So if you bought your car in 2007 (which is clearly more than 910 days ago), and the balance of the loan on the car is $13,000, but the Blue Book value is only $7,000, then when you file a Chapter 13 you would only pay back $7,000 over a period of three to five years (instead of the $13K still owed on the contract).

No, they cannot legal do so, unless these amounts were expressly authorized by the original agreement between you and the original creditor. That doesn’t mean that the collector won’t add such costs into its attempts to collect. But doing so is a violation of federal law.

The rules that govern how a debt collector can collect on a debt are laid out in black and white by the Fair Debt Collection Practices Act (FDCPA). This federal statute spells out exactly what a collection agency can and can’t do. One of the things it is prohibited from doing is adding additional charges such as any interest, fee, charge, or expense incidental to the principal obligation. So when you look at the collection letter that the company sent you, and it provides you with a breakdown of the amount that is due, you should look very closely at whether or not such costs have been created. If they are, this will at the very least explain why a $300 debt has now turned into a $1,500 avalanche.

Assuming that the original creditor did not explicitly give the collection agency permission to add such costs in its contract/agreement with them (and they almost never do), then asking you to pay for them is a violation of the FDCPA. And of course proving that the violation has occurred is as simply as providing your attorney with a copy of the letter you received. Most of these kinds of violations carry a fine of $1,000, which must be paid to you by the debt collector. The other nice component of this law is that the collection agency must also pay your attorney fees. This means that when you hire a FDCPA attorney to go after the collectors, you don’t have to pay anything up front.

Yes, they can. But if they leave a voice message on your phone, they have to follow very specific rules set out by the Fair Debt Collection Practices Act (FDCPA). If those rules are not followed, then a violation of the act has occurred, and you will be entitled to damages.

To begin with, it is always important to point out that if the phone the collection agencies are calling is your mobile/cellular device, that in and of itself is a federal violation of law. The collectors are explicitly prohibited from contacting you on your cell phone. Each time they call your cell phone, it is a violation of the Telephone Consumer Protection Act (TCPA), and the normal damages awarded for such a violation is $500 per call to your cell phone. But regardless of whether or not they call your cell phone or home phone, the collection agencies must abide by the law when they leave a voice message.

Whenever a collector leaves a voice message for you (either on your cell phone or home phone), he/she must identify who they are, why they are calling, what company they are with, the fact that they are calling about a debt, and that they are a debt collector. All of that must be disclosed in the message. So an example of a message that complies with the law would go something like this: “Good morning. This Jim Taylor. I am with Debt Collectors Are Us. I am calling you in regards to a debt that you owe that my company is trying to collect on. If you could please give me a call back at 1-800-000-0000.” Now if are sitting there scratching your head and thinking, “I’ve gotten a ton of messages from collectors, but none have ever left a message with that kind of detail,” then you are one of millions of people whose rights have been violated.

Not necessarily. It depends on two things: 1) Whether or not you actually want to keep your home; and 2) If you do want to keep your home, whether or not there is a substantial amount of equity in the home. The answers to these questions will determine what your options are, and what kind of bankruptcy you should file.

If you qualify for a St. Louis Chapter 7 and you wish to keep the home, it is possible to retain the asset. So long as there is no equity in the home, then you can simply reaffirm the loan, and continue making regular monthly payments on it (while getting rid of your unsecured debts). But the Bankruptcy Trustee (the person assigned to your case by the government) will want to know if there is any equity in the home. If there is substantial equity in the home (above any exemptions that can be applied), then it is possible that the Trustee will want to liquidate the asset. So for example, if you own a home that has a loan against with a balance of $100,000, and you believe that the fair market value (the amount that the home would actually sell for) is $150,000, then there is equity of $50,000 (150,000 – 100,000 = 50,000). The government then gives you a $15,000 exemption to cover any equity that may exist in the home. This would reduce the equity (on paper) down to $35,000 (50,000 – 15,000 = 35,000). Having $35,000 worth of equity in the home is more than enough for a Chapter 7 Trustee to go after the asset. But if the goal is to keep the home, then there is an alternative.

If you file a St. Louis Chapter 13 bankruptcy, it doesn’t make any difference how much equity exists in the home. Filing such a bankruptcy protects all secured assets (like a house or car). This type of bankruptcy is especially helpful if you are behind on your mortgage payments, or even have a pending foreclosure. A repayment plan is set up in which you make monthly payments to the Trustee, who then disperses those funds to various creditors (arrearage on the mortgage, car loan, tax debt, back child support, etc.) And of course, you get to keep the home. There is even the possibly (depending on your set of circumstances) of getting your unsecured debts discharged as well in a Missouri Chapter 13.

That depends on what you believe to be ‘a lot’ of debt. For some people, once they reach several tens of thousands in credit card, several thousand more in medical bills, a few hundred in payday loans, and when many of the creditors are starting to sue of the existing debts. For others, they are able to see the ‘writing on the wall,’ and recognize that the example given above is in the near future. And still others will wait years before they even consider filing for a Missouri bankruptcy, enduring endless phone calls and harassment, because the mere thought of doing such a thing is devastating. Even if these situations do not precisely fit the description of where you are in life, you probably fall somewhere in between.

The main thing to keep in mind is that, regardless of how much debt you currently own, the pressures of dealing with it can be alleviated immediately upon filing for bankruptcy. No more phone calls, threatening letters, law suits, or any collection activity whatsoever. Once the debts are discharged, you will have moved into what the court describes as a ‘fresh start / clean slate’. This discharged literally wipes the slate clean, and gives you the chance make a fresh start in life by moving forward.

And opportunities to rebuild your credit rating and/or score will be immediate. Most individuals believe that filing a St. Louis Chapter 7 bankruptcy or a St. Louis Chapter 13 bankruptcy will ruin their chance at ever reestablishing a good credit history (and that they’ll never again be able to buy a car, or a house, or even purchase a pair of socks at JC Penney). But the exact opposite is true: Within a couple of years after filing for bankruptcy, you will generally be in a position to make purchases such as house. And improving your credit rating by more immediate methods is available, too, such as getting another credit card.

If you’re unable to pass the Means Test, then it’s certainly time to hire a bankruptcy attorney (if you haven’t already). When you file a St. Louis Chapter 7 bankruptcy, a large amount of information is provided to the court. All your real estate, personal property, stocks, bonds, and other property has to be disclosed. All sources of income need to be revealed. And all of your debts have to be shown. In addition, it is important to determine what your household size is, because this will initially determine whether or not you pass the vaunted Means Test.

The Means Test is a mathematical formula that was devised by the US Congress (actually, a bunch of lawyers from major credit card companies who lobbied Congress very aggressively) to eliminate all the ‘abuse’ that had evidently been occurring (according to majority in Congress at the time, there had been widespread abuse of the system by people all over the place filing for bankruptcy on a whim). The test is supposed to determine whether or not your income is sufficient to support you without having to file for bankruptcy. This test is broken up into two parts: First, if you are below a certain median income level, then you will most likely qualify for a Missouri Chapter 7 (assuming you haven’t filed a Chapter 7 within the last eight years), and not have to deal with the Means Test at all. So for instance, according to the government, the average or median income for a household of two is: $50,603 (as of November 2, 2011). If you are a household of two, and your total household income is less than this amount, you can do a Chapter 7.

If you are above the median income level, that doesn’t necessarily mean that you can’t do a St. Louis Chapter 7. At this point, all the deductions and exemptions that the government allows you to take come into play. Things like the amount you spend monthly on healthcare-related expenses, the amount of tax deducted from your paychecks monthly, any court-ordered child support or maintenance, or childcare-related expenses, and the amount you contribute monthly to charitable organizations. There are several other deductions that can be taken as well, such as expenses for a car, a house, and what you spend on regular living expenses. But if after all of these deductions and exemptions are taken you still do not pass the Means Test, it is most likely that you will have to file a St. Louis Chapter 13 bankruptcy. This type of bankruptcy is described as a repayment plan over the course of three to five years, in which certain debts are paid back over time.

Yes, but there are a great many rules that the collector must follow when they do something like this. And more often than not, the collector breaks those rules, disobeys the law, and violates the rights of not only the person who owes the debt, but also the individual to whom the call was made (i.e. the friend or family member).

The area of law that governs this type of activity is called the Fair Debt Collection Practices Act. This is a federal law that regulates what a collection agency can and can’t do in their attempts to collect on a debt. For instance, the FDCPA states very clearly that if a debt collector communicates with someone other than you about your debts (like a friend or family member), the only acceptable reason for doing so would be to confirm the correct location information (i.e. address or phone number) of the person who owns the debt (you). The collector cannot, however, tell the friend or family member that they are calling about a debt, or that you owe a debt, or to whom you owe a debt, or that they have been trying to find you without any success so that they can collect on the debt, or even that they are a debt collector. They also can’t call the friend or family member more than once (unless that person requests another call).

In other words, if a third party individual (whether that person is a friend, family member, high school classmate, neighbor, off-handed acquaintance, or a reference) is contacted by a debt collector, that individual should really have no idea that they were just talking to a collection agency. That’s how strict the law is. And as a result, there are frequent violations. Such violations typically carry a fine (or damages) of $1,000, which would have to be paid to you.