Creditors Violating Bankruptcy Procedures? Know Your Rights

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When you’re deep in debt, you might be getting phone calls from collection agencies, threatening letters from creditors, and can even be facing actions like wage garnishment. This can be stressful, scary, and embarrassing.

Fortunately, when you file for bankruptcy, an automatic stay – or stop collection activity order – is put in place, and creditors cannot attempt to collect from you. Think of this as a restraining order against all debt collection activities – phone calls, emails, billing statements, lawsuits, and garnishments. In most cases, creditors stop collecting as soon as they learn of the bankruptcy filing. However, sometimes creditors violate this rule.

Check out our tips on what counts as a violation, and what steps you can take to stop the harassment.

What Are Stop Collection Activity Orders?

When you file for bankruptcy, an automatic stay is put in place by the court. This means that creditors cannot attempt to collect debt from you – including garnishments, phone calls, letters, or showing up at your house or workplace.

During your bankruptcy proceedings, this temporary stay order is put in place. It stays in place until the bankruptcy is finalized. At that point, a bankruptcy discharge injunction order goes into effect. This will permanently get rid of nearly all of your remaining debts that can be discharged in a bankruptcy case. Certain debts, like child support obligations and some others, never go away. This makes the automatic stay permanent, meaning even after your bankruptcy is finalized, collectors cannot harass you for any debts incurred before you file for bankruptcy. Any new debts you may take on after your bankruptcy is filed would not fall under the stay and would be fair game.

What Happens When Creditors Harass You?

Even though the court orders an automatic stay, sometimes not all creditors will follow the ruling. They might keep calling you, sending letters, and trying to garnish wages, even after the bankruptcy is finalized.

This can be demoralizing. You just went through the entire bankruptcy process, you followed every rule throughout the filing process, and creditors are still calling.

This isn’t right, and you have legal options. And when you successfully pursue legal actions, the debt collector is required to pay your attorney fees. They must also pay damages to cover any losses you endure.

Steps You Can Take To Stop Creditor Harassment

To hold creditors accountable for violating bankruptcy proceedings, you must work with a bankruptcy attorney to review your options, and the steps you must take.

Your attorney will walk you through the process, but some key steps you will need to take include:

  • Document every post-bankruptcy violation. Keep track of which creditors committed the violation, what they did, and the date it occurred.
  • Compile information about the creditors, including the company name, company address, the person’s name who is contacting you, the phone number they are calling you from, details about the conversation (including if they were polite or rude), and if the person knew you filed for bankruptcy.

After gathering this information, your bankruptcy attorney can take it from here. Your attorney will review the information and determine how to proceed. You must let your bankruptcy attorney handle all communications with the creditors from this point, as they will do it by the book to ensure it doesn’t damage your case.

Not all creditor activities are actionable, but this office will review each potential claim in your case.

Let Us Help You During Your Bankruptcy

If you completed bankruptcy proceedings and are still being harassed, you can seek legal action against your creditors. Let our lawyers at The Law Offices of Alexzander C.J. Adams, P.C. help. We will help you hold the creditors responsible for violating your rights, and make them pay you the damages you’re owed, and end the harassment. We work for you, the people, and not institutions. Contact us for a free case evaluation, or no-obligation consultation. We are dedicated to helping you overcome this small bump in the road and assisting you to get on with your life.

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