Before Filing Bankruptcy – Common Mistakes When Talking to Creditors

You’ve hired an attorney to file for bankruptcy, but your bankruptcy case isn’t filed yet.  You still have to pay your attorney, gather documents and information that your attorney needs to file, and sign the petition and schedules.
Although the process from retaining an attorney to actually filing for bankruptcy doesn’t have to take a long time, there is going to be a period of time in between those two events, and during that time you’re going to get calls from bill collectors.  What do you say?  What don’t you say?
Obviously, follow the instructions of your attorney.  If you are one of my clients, this is what you say:

I have retained an attorney to file for bankruptcy.  His name is Greg Holbus.  Please call his office at (920) 490-6160 to discuss my account.

That’s it.  Short.  Simple.  Sweet.
How can you screw this up?
Not Answering the Phone
Some people refuse to answer the phone when a bill collector calls.  Why?  Your bill collector is attempting to either get a payment from you or gather information from you.  If the bill collector is unable to get either, he’s not just going to give up.  He or she will accelerate their collection efforts – often by filing a lawsuit.
Although creditors are free to file lawsuits until your bankruptcy case is filed, most creditors won’t bother once they have been able to confirm that you’ve hired an attorney for bankruptcy.  It costs them time, money, and energy, and what will they get for their effort if your bankruptcy case is filed before they can collect?  Nothing.
So don’t leave them in the dark.  Answer the phone and tell them to call your attorney.  You’d be surprised at how much your telephone will stop ringing!
“I filed for bankruptcy.”
Did you?  Or have you only retained an attorney for bankruptcy?  Hint: if you haven’t yet signed a 60-80 page document and been given a case number (formatted as 15-00000), hearing date, hearing time, and hearing location – chances are your case is not yet filed.  Retaining is not the same thing as filing.  Retaining means that you have hired an attorney to do the necessary work to prepare a case for filing.  If creditors call you and ask, make sure that you’re telling them that you’ve “filed bankruptcy” only after you’ve actually filed bankruptcy.  Beforehand, you have merely “retained an attorney to file bankruptcy”.
Giving Your Life Story
Believe me, I understand how important someone’s story is.  They’re about to go bankrupt – it isn’t likely to be the high point in their life, and people take refuge in thinking about everything that happened to them that forced them to this point.  Many people are forced to file for bankruptcy through no fault of their own – victims of unfortunate circumstances.
That being said, circumstances aren’t often very relevant.  And as incredible as you may believe your story to believe, I guarantee you that your debt collectors have heard the same story hundreds of times before.  Sharing your story isn’t likely to get you very far, yet you’ll be forcing yourself to revisit painful memories.  It’s best to think ahead and think positively.
Being Hostile with Debt Collectors
I get it.  A lot of debt collectors are rude.  The temptation to retaliate and be rude back to them is overwhelming.  I would never defend their rudeness, nor dismiss your desire for retribution.
But what’s it going to achieve?  What do you hope to accomplish?
Remember that debt collectors are people doing a job.  Their job is to get money or – if they can’t get money – to get information.  Individual collectors may be working on dozens or even hundreds of accounts each day.  You’re probably not the only person they’ve called today who has been rude to them.  They’re tired and irritable.  If you get hostile with them, they’re likely to respond in kind, and it’s only going to create a feedback loop that gets worse and worse.
Bear in mind that it’s a human being on the other end of the phone.  Bear in mind that they’re doing a job.  Bear in mind that you’ve defaulted on an obligation and they have a right to attempt to collect on their debt.  You don’t have to be nice.  But be respectful.  Don’t get into a shouting match with them.
Yeah, some of them will still act like pricks.  But you’d be astonished at how many of them treat you with respect if you stand out as one of the few people they’ve dealt with all day who didn’t throw a fit.
Making Payments
I wish that this went without saying, but it doesn’t.  Many people will feel pressured to make payments and finally cave in and make the payment.
Unless your attorney has explicitly instructed you to pay on certain debts, never make a payment or give payment information (such as bank account numbers or credit card information) to a debt collector.  If you’re not sure, consult with your attorney before making a payment.