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Bankruptcy includes protection from creditor harassment

New Jersey citizens should not have to deal with unfair or illegal debt collection practices from major banks and creditors. A bankruptcy judge recently handed down a verdict that essentially told Bank of America to be more mindful of those consumers who file a debtor's discharge.

Normally, a debtor's discharge is issued during the course of a personal bankruptcy. The judge recently fined Bank of America $12,500 for legal fees and emotional distress, which a consumer incurred because Bank of America failed to adhere to the rules regarding a debtor's discharge when they called him 38 times after the bank was legally prohibited from doing so.

This case and subsequent fine originated after Bank of America was served with a debtor's discharge, which is a legal injunction that prohibits debt holders and collection agencies from corresponding with their debtors through phone calls, letters or other means. While the court's fine sends a message to creditors and debt collectors, Bank of America's $2 billion dollar profit for the last quarter of 2011 will easily absorb this fine. Unfortunately, there are multiple reports that banking institution has routinely ignored these injunctions in the past and may do so in the future.

This bankruptcy court ruling aids all state and nationwide consumers attempting to reorganize their finances, especially those going through a personal bankruptcy. However, it hardly guarantees that it will stop creditors and debt collectors from trying to take whatever means necessary to collect their debt, even if it means using unfair tactics. Those New Jersey residents who are victimized by these types of illegal activities may benefit from understanding the law, particularly under the terms of the Fair Debt Collection Practices Act, and taking appropriate action to prevent abuse from overzealous creditors.

Source: The Huffington Post, "BofA Allegedly Called Debtor 38 Times After He Filed For Bankruptcy," Alexander Eichler, March 30, 2012

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