Stop collections using the bankruptcy process.
When overdue bills and collections calls begin mounting, it’s a good time to consider filing for bankruptcy to stop collections. If you’re unfamiliar with the bankruptcy process, you’ll be happy to learn that the laws require creditors to stop calling you once you file for bankruptcy and send notice of the filing to your creditors. Should any pesky creditors continue to call you, even after you refer them to your bankruptcy attorney, you have recourse under the law. When creditors are hounding you, stopping collections using bankruptcy laws can bring a huge sense of relief.
How do you get debt collections to stop?
Debt collectors will keep calling you and attempting to collect the debts unless you file for bankruptcy. Bankruptcy is a legal process that can give you a fresh start if you are deeply in debt and struggling to keep your head above water. Some debtors can have their debts erased, while others can get back on course with reasonable repayment plans. Because bankruptcy is a legal process, there are laws governing what happens after you file a bankruptcy petition with the court. These laws give you the benefit of a bankruptcy “stay”. A stay is a stop collections order for your creditors.
How does a “stay” work in bankruptcy court?
Again, a stay is a stop collections order for your creditors, telling them to quit bothering you and follow the legal process for making claims in bankruptcy court. Once you file for bankruptcy, creditors seeking repayment for all debts you had before you filed have to leave you alone. Instead of calling you to collect on your debts, they can file documents with the court to establish their claim. Sometimes, a creditor may receive full or partial debt repayment during the bankruptcy process (such as if you have a repayment plan or if the debt is not dischargeable). In other cases, a creditor may not get repaid because the debt is discharged (released) by the bankruptcy court. In some cases, a creditor may seek relief from the stay from the court. However, regardless of whether a creditor gets paid, they are not allowed to contact you once the bankruptcy stay is in place.
There are some notable exceptions to the bankruptcy stay that you should know about. Specific kinds of debts are still collectible even if you have the stay in place. However, the majority of common debts fall under the stay, such as credit card debt or auto loans. Examples of debts or charges that can still move forward when a stay is in place include, but are not limited to:
- Ongoing child support payments or alimony (but collection of overdue past support payments is covered by the stay)
- Criminal charges or investigations
- Evictions when a landlord has already received an eviction judgment
- Tax audits or assessments (but collection of overdue taxes is covered by the stay)
If you’re wondering whether certain debts are subject to the stay, talk to your bankruptcy attorney as they prepare your case. You need to fully disclose your various debts to your attorney anyway, so it’s a good opportunity to discuss about whether someone can contact you while the stay is in place. Make sure you ask for your bankruptcy case number after the petition is filed, in case creditors keep trying to contact you.
What if creditors don’t stop hassling you after you file for bankruptcy?
Unfortunately, it’s relatively common for people who file for bankruptcy to receive continued calls from creditors. These calls may continue even if you tell the creditors that you have filed for bankruptcy, tell them your case number, and give them your bankruptcy attorney’s contact information. It can be extremely frustrating to get calls even after you sought protection from repeated collections efforts through the bankruptcy process. If you’re getting multiple calls from a creditor hassling you, and the creditor definitely has notice of the bankruptcy, talk to your bankruptcy lawyer. You may have recourse under the law against the pesky creditor.
Your right to sue debt collectors who harass you
In some cases when a creditor is violating the bankruptcy stay by contacting you, your bankruptcy attorney may advise you that it makes sense to file a lawsuit against the creditor. The law gives you recourse to sue the creditor because of their blatant disregard for the bankruptcy process. You can request damages and attorneys’ fees in the lawsuit. The powerful enforcement mechanism of a lawsuit against a creditor not only can get the creditor to stop contacting you but also can provide you with financial compensation for your trouble because the creditor violated your expectation that the bankruptcy stay would protect you.
It’s very important to carefully discuss any creditor contact attempts with your attorney to ensure you are getting appropriate legal protection because of the bankruptcy stay. Your attorney will evaluate whether filing a lawsuit against a creditor makes sense, given your individual circumstances.
Reach out to a bankruptcy attorney for help with persistent creditors
Are you struggling with debt and fielding constant collections calls from creditors? Reach out to our firm for legal advice about bankruptcy. We offer confidential consultations in the greater Portland, Oregon, metropolitan area with our knowledgeable bankruptcy attorneys. At the Law Offices of Alexzander C.J. Adams, P.C., we can help you learn more about your debt-relief options. To get started, please call us at 503-278-5400 or toll-free at 888-560-8146, or complete our online contact form.