What do I say to a collection agency if I'm filing a Chapter 7 Bankruptcy in Arizona?

I'm Joseph C. McDaniel and I am a Board Certified Arizona Bankruptcy Attorney. My firm is a debt relief agency and I help both people and businesses file bankruptcies. If you're interested in filing a bankruptcy in Arizona or have questions, please call our firm at 602-297-3025 or visit my free Bankruptcy blog at http://www.arizonabankruptcyblog.info/ and my website at http://www.josephmcdaniel.com/

What Do I Say to Collection Agencies if I'm Going to be Filing a Chapter 7 Bankruptcy in Arizona?
Well, you can start with the truth.

If you're not as young as you used to be, that also means you don't need to tie up any excess brain cells on a cover story!

Here's the deal: collection agencies are going out of business, because if you have to decide between paying your mortgage or your unsecured credit card type debts, who you gonna pay?

So they're much more likely to be aggressive.

But they don't want to waste their time, either.

In general, it's pretty simple. You tell them you've talked to a bankruptcy lawyer, and that you're going to be filing a Chapter 7 or Chapter 13. They'll tell you that they'll need to keep calling until you can "confirm representation" (give them a lawyer who'll tell them that they've been retained).

Some collection agencies, but not most, will lie to a debtor. They'll threaten all sorts of things they can't do in order to coerce a payment.

One thing to avoid like the plague is sending a series of postdated checks. The collector generally says that unless you send in five postdated checks immediately, you'll be sued immediately. And that the checks will be held until the date written on them.

Both of those are normally lies. That is, a collector almost never has the ability to cause a lawsuit to be filed against a debtor, or to prevent such a lawsuit. The collector is working, generally, on a hourly basis, and is just grinding through the day.

But the multiple post dated checks, if you send 'em in, get deposited on the same day, and then the collection agency uses the threat of prosecution on a bad check charge to coerce payment.

Bad stuff. If you know that you're going to file a bankruptcy, just tell the collector that you're going to be filing as soon as you can get enough to pay your lawyer, but invite the collector to call back frequently to check status, because you don't want to forget to file that bankruptcy!

And don't try to use bankruptcy as a threat, because that won't work; the collector will receive the bankruptcy as a relief, because then he no longer has to keep calling you and failing to collect, which earns him bad marks from his boss.

Bear in mind that you may eventually be sued by some unsecured creditor, but that generally takes quite some time. And if you file an answer instead of letting the matter go by default, it will take a couple or three months until a judgment is taken against you, and that generally gives you plenty of time to get precise bankruptcy schedules ready to file.

After you file your bankruptcy, creditors who are listed on the master mailing matrix stop calling, because it's not their first rodeo.

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Education

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