In the cat-and-mouse game between debtors and creditors, it’s no surprise that there are dishonest debt-collection groups.  This article mentions Brachfeld Law Group: we interact often with this collector.  I generally find them ethical, although I have seen them go out of the bounds of legal and ethical propriety.  They can get away with a lot of rules-bending because their victims can’t afford to fight them.

The ultimate way to defeat Brachfeld and other groups is to file bankruptcy: so soon as the petition is filed, there is a federal injunction against any creditor from attempting to collect on a debt.  Brachfeld and all other honest debt collection agencies honor this injunction.

Some don’t, and the difference is spectacular.  I had a client with several “payday” loans, high-interest loans taken out against her next paycheck.  The creditors did not give addresses, only phone numbers.  For one client, they continued to call her asking her to pay back the loan even though the client said “I’ve already filed for bankruptcy.”  They said that didn’t matter, that they were pursuing a criminal action against her and pay up or they would send marshals to her workplace to arrest her.  The creditor would not talk to me, saying I did not represent her in the criminal matter.

Panic can set in on a debtor in such a case.  Here’s how I calmed my client down: criminal actions can only be brought by a government agency, and indeed, once the government agency has started criminal charges, the private party has no more say in the matter.  So a private party’s threat to arrest you is an empty threat.

I also sent a letter to the creditor via fax, asking it why I should not file a lawsuit alleging a violation of the automatic stay, and who is your agent for service of process?

The harassing calls stopped after my letter.