4 replies to this topic

[Cobrit]

I am preparing to file Chapter 7 on my own. The law says that you have to have filed Federal tax returns in order to proceed. I am on Social Security Disability, and have not filed tax returns for the last 2 years as I was told by the IRS that I did not have to due to the fact that my only "income" was Social Security, and that the amount I received was not enough to have to file a tax return.

Therefore, how do I proceed in this case?

Many thanks in advance.

[RetCopPrlgl]

If your only income is Social Security Disability, what is the point of filing Chapter 7 Bankruptcy ?  Under Federal Law, private creditors are not permitted to garnish (attach) your benefits.  Sure, they could sue you and obtain a judgment against you, but they wouldn't be able to go after your benefits to satisfy the judgment.

 

I am not an attorney. My comments are made based on my training and experience as well as diligent research.  I am also not perfect, therefore, I will accept constructive criticism, if tendered with respect.

[Cobrit]

Thanks for the reply. Basically I want to be able to have a fresh start, and I have no way of paying off my debt. I understand that they cannot garnish SS benefits, but that does not stop each of them calling me 2 or 3 times away and having people show up at my door at night,

[RetCopPrlgl]

A fresh start at what ? 

A Chapter 7 will remain on your credit report for 10 years, so your creditworthiness is pretty much shot, just like it is now if you've got collectors bothering you.

Your best bet is to spend the filing fee on paper and postage.  Send all the Creditors a "cease and desist" letter, telling them to have NO further contact with you whatsoever, by mail, telephone, or in person.

Once they receive the letter (send it certified mail, return receipt requested) they can ONLY communicate one more time to advise they are going to stop contacting you.

Just Google "creditor cease and desist letter" and you'll find several good sample letters you can customize.

I am not an attorney. My comments are made based on my training and experience as well as diligent research.  I am also not perfect, therefore, I will accept constructive criticism, if tendered with respect.

[Tax_Counsel]

RetCopPrigl said...

Your best bet is to spend the filing fee on paper and postage.  Send
all the Creditors a "cease and desist" letter, telling them to have NO
further contact with you whatsoever, by mail, telephone, or in person.

Once they receive the letter (send it certified mail, return receipt
requested) they can ONLY communicate one more time to advise they are
going to stop contacting you.

That's not quite correct. I assume you are referring to the federal Fair Debt Collection Practices Act (FDCPA), as it is the only federal law that regulates debt collection by private persons. It only applies, however, to "debt collectors" collecting consumer (i.e. non-business) debts. The general definition of "debt collector" is "any person who uses any instrumentality of interstate commerce or the
mails in any business the principal purpose of which is the collection
of any debts, or who regularly collects or attempts to collect, directly
or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6)(underlining added). As the underlined portion indicates, the law regulates those who collect debts owed to someone else, e.g. collection agencies, and not the original creditor. There are certain other exclusions from the definition of "debt collector" as well.

So, if it is the original creditor collecting the debt, the FDCPA won't apply and a "cease and desist letter" is pretty much worthless unless the debtor happens to live in one of the few states with a debt collection law that applies to the original creditor. The creditor can continue to call all during the day and night, send all kinds of dunning letters, etc., even after getting the request to stop in most states.

Where the FDCPA applies, the provision concerning ceasing communication is found in 15 U.S.C. § 1692c©, which states as follows:

If a consumer notifies a debt collector in
writing that the consumer refuses to pay a debt or that the consumer
wishes the debt collector to cease further communication with the
consumer, the debt collector shall not communicate further with the
consumer with respect to such debt, except—

(1) to advise the consumer that the debt collector's further efforts are being terminated;

(2) to notify the consumer that the debt
collector or creditor may invoke specified remedies which are ordinarily
invoked by such debt collector or creditor; or

(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.

If such notice from the consumer is made by mail, notification shall be complete upon receipt.

As  you can see, it does allow certain other communications besides just telling the debtor that they will cease further communication.

Finally, note that actions taken in litigation to collect the debt are excluded from the reach of the FDCPA. So, for example, the debt collector or creditor could serve a summons and complaint in a lawsuit without violating the FDCPA provision on ceasing communication. (Lawyers and law firms collecting debts for clients prior to filing litigation are, however, generally treated as debt collectors and must comply with the FDCPA.)