A Survey of Debt Collector Lies and Bankruptcy in Colorado
1. “Once we get a judgement, it’s too late for bankruptcy” Not true, bankruptcy does get rid of debts even if the creditor has a judgement. In some cases a judgement can become a lien against your home, which will survive bankruptcy in Colorado unless your bankruptcy lawyer takes steps to remove the lien within the bankruptcy case.
2. “If you don’t pay us right now, we will garnish your wages” Creditors cannot garnish wages in Colorado without a judgement. This means they have to serve you and take you to court, before they can take part of your paycheck. In some circumstances taxes and student loans are an exception to this rule, but bankruptcy will provide protection against wage garnishment for taxes or student loans during the case.
3. “We’ve looked into your financial situation, and you don’t qualify for bankruptcy.” Debt collectors are unable to access the information necessary to determine if you qualify for bankruptcy, and do not have the legal experience to determine your eligibility for bankruptcy, and therefore any statement that you do not qualify is going to be untrue 99.99% of the time.
4. “You cannot file bankruptcy on this type of debt anymore.” Some debt collectors are using the 2005 changes to the bankruptcy law to mislead people into thinking credit card bills or medical bills are not dischargeable. Almost all types of debt aside from student loans and most taxes, remain subject to a chapter 7 or chapter 13 bankruptcy discharge.
5. “Even though this debt is ten years old, you still owe it.” Older debts may well be un-collectable owing to the statue of limitations, don’t let debt collectors mislead you into believing you still owe an old debt. Instead, talk to a qualified bankruptcy lawyer concerning the statue of limitations for that type of debt.
There is a fair amount of confusion surrounding bankruptcy law and debt collectors often try to capitalize on various misconceptions in order to pressure debtors to pay or not file bankruptcy. It is important to check with a qualified bankruptcy lawyer to see what a Chapter 7 or Chapter 13 bankruptcy can do for your financial situation, don’t rely on debt collectors for this important information. This seems an obvious point, but many intelligent people are too embarrassed to seek financial help from a bankruptcy lawyer. You shouldn’t be, it can make all the difference.
Be aware that all of these lies can form the basis for a lawsuit against your creditor under the Colorado and Federal Debt Collection Acts.