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Debt collection tactics debtors should be aware of

Michigan residents may have participated in a survey that the Consumer Financial Protection Bureau released the results of in early January. The agency asked more than 10,800 people between 2014 and 2015 about their interactions with debt collectors. Roughly 2,000 people responded, and 75 percent said that debt collectors continued to contact them after they had been asked to stop. By law, they must cease contact after receiving a cease contact request in writing.

Approximately one-third of respondents said that they had been contacted after 9 p.m. or before 8 a.m. By law, debt collectors must refrain from contacting debtors during the late evening and overnight hours. Of those who responded, 40 percent said that debt collectors called them four or more times a week. That is a level that is considered to be harassment, and some people were contacted about debts that did not belong to them.

In July 2016, the CFPB proposed rules that would strengthen protections for people being contacted by debt collectors. These rules would limit the number of times a debt collector could contact an individual. It would also require them to have correct information regarding a debt as well as a way for individuals to easily resolve a dispute. The CFPB is currently reviewing comments on those proposed rules and is exploring other ways to reform the industry.

Filing for bankruptcy may stop foreclosure or make it easier for a debtor to catch up on past due bills. In some cases, debts may be discharged instead of reorganized. Those who wish to file for bankruptcy may want to talk with an attorney before doing so. An attorney may be able to help debtors learn more about the benefits of filing such as an automatic stay against creditor collection actions such as phone calls.