Should I ignore a debt collector's calls and letters?

If you’re not sure whether you should answer a debt collector’s call or call a creditor back, consider whether you’re judgment-proof or planning to erase debt in bankruptcy. Ignoring creditors in those instances is often fine.

By , Attorney

Question

I'm behind on my bills, and I've been hoping to catch up. However, debt collectors are mailing notices and calling my house. Is it okay if I turn off the phone and don't acknowledge debt collection calls? I'm not sure what happens if you ignore debt collectors.

Answer

It depends. Dealing with growing debt is difficult, so wanting to ignore debt collectors is understandable—and sometimes, not acknowledging debt collectors can be the right thing to do. Before making that decision, determine if you'll be able to pay in the future or if you'll be filing for bankruptcy.

If you'll use bankruptcy to wipe out or "discharge" debt, your strategy of ignoring creditors will work fine. When you're going to get rid of debt that way, there's not much reason to talk with debt collectors, and answering calls from debt collectors can make things work. Debt collectors know bankruptcy will wipe out the debt and will often double down on debt collection efforts—you probably don't want to be harassed even more.

If getting rid of debt in bankruptcy isn't an option, and you'll have the funds to pay your debt in the future, consider talking with your creditors. However, you'll likely want to wait until you develop an action plan. The timing—and your situation—is everything. Here are a few things to consider.

Ignoring a Debt Collector's Calls and Letters When You're Judgment Proof

If you're not employed or making very little, and you don't have any valuable assets a debt collector can take, you likely don't need to worry about repaying your debts. Debtors like you can ignore creditor calls—you're judgment proof.

People who are judgment proof can ignore creditors because debt collectors can't collect from judgment-proof people. But being judgment-proof is rare. So before assuming you're a judgment-proof debtor, you'll want to know what a creditor might be able to take to satisfy a debt, and here is how you do it.

Find out the types of property your state lets debtors protect from creditors. Every state has laws protecting or "exempting" a debtor's property like clothing, household goods, some equity in a car and home, and a retirement account.

But exemption laws vary widely. Here's where you'll find your state's exemption laws (exemption laws apply during collections and bankruptcy).

Also, don't assume you're judgment-proof unless you're sure your financial situation is permanent. Even though most creditors must file a debt collection lawsuit and get a money judgment before taking your property with wage garnishments, bank levies, and property seizures, money judgments last for years. And the interest on judgment debt accumulates the entire time the debt remains outstanding.

Ignoring a Debt Collector's Calls and Letters When You're Considering Bankruptcy

Debt collectors rarely give up. Here are some things to be aware of while figuring out how to pay your debt or whether you should discharge your debt in bankruptcy.

  • You can stop the calls. The Fair Debt Collection Practices Act (FDCPA) requires a debt collector to stop communicating with you if you send a written request, subject to a few exceptions.
  • Your credit will suffer. The creditor will continue to report the delinquency to the credit bureaus.
  • Your debt will get bigger. Expect the lender or the debt holder to add interest, late fees, and collection costs to the debt balance.
  • You might get sued. The debt collector might file a lawsuit and get a money judgment. A creditor with a money judgment can garnish a debtor's wages, go after the funds in a debtor's bank account, and seize property that isn't protected by an exemption. Learn about lawsuits stopped by bankruptcy.
  • You can protect some income and property. If you lose a lawsuit, review your state's exemption laws to determine what debtors can protect.

Next, you'll want to consider whether you can get the debt relief you need by filing for bankruptcy. Chapter 7 bankruptcy will likely be a good option. Debtors can wipe out qualifying debt, like medical bills, credit card debt, personal loans, and more, in approximately four months without paying anything to creditors.

If you make too much to pass the Chapter 7 means test or have a house, car, or other property you'd lose in Chapter 7, Chapter 13 bankruptcy will likely be a good choice. Find out what you'll pay in a Chapter 13 plan.

And filing for bankruptcy stops debt collectors almost instantly. Creditors and debt collectors learn about the automatic stay put in place by the bankruptcy court shortly after you file and must stop most debt collection actions immediately.

When You Should Answer Debt Collectors Calls

Ignoring a debt collector isn't always a good strategy. You should call a debt collector back in these two instances:

  • Find out if the debt is legitimate. If you don't recognize the debt or aren't sure the amount of the debt is correct, write to the debt collection agency and dispute it. The FDCPA gives you the right to request debt validation.
  • Settle the debt. You might be able to get the debt collector to settle for a lesser amount. If you can convince the creditor you can't pay more—or if the creditor doesn't want to incur court costs—you might be able to settle the debt for far less than you owe.

Many people are uncomfortable asserting their rights or negotiating lesser amounts with debt collectors. An attorney can help.

Need More Info?

We want to help you find the answers you need. Go to TheBankruptcySite for more easy-to-understand articles, or consider buying a self-help book like The New Bankruptcy by Attorney Cara O'Neill.

We wholeheartedly encourage research and learning, but online articles can't address all debt, credit, and bankruptcy issues or the facts of your case. The best way to protect your assets from debt collectors and in bankruptcy is by consulting with a local bankruptcy lawyer.

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