For an individual seeking the protections offered through bankruptcy, one of the first benefits realized is the stoppage of creditor collection efforts by any means, including mail and phone. Such calls can be annoying and stressful; sometimes even harassing. One commonality across different chapters of bankruptcy is that, except for particular circumstances of repetitive filers, the filing of a bankruptcy petition causes issuance of the “automatic stay” – a temporary injunction that stops most collection efforts. The stay goes into effect the moment a bankruptcy petition is filed.
The automatic stay requires creditors to immediate halt their collection efforts while the debtor reorganizes. Depending on the chapter, the process takes anywhere from a few months to five years. During this time, the stay applies to most types of debt, including mortgages, car-loans, and lines of credit. It also stops foreclosure and vehicle repossessions. In a successful case, the automatic stay ends with the issuance of the discharge order, which is a permanent injunction to the collection of dischargeable debts.
Exceptions to the automatic stay
The stay does not automatically go into effect when an individual has filed for bankruptcy more than once in the past year, although most times it can be sought even in this circumstance. Actions related to criminal cases, determinations arising in divorce proceedings and domestic support obligations not entailing actual collection, and some eviction cases are notable exceptions to the restrictions imposed by the stay injunction. The automatic stay also does not apply to new debts incurred after the initial filing, although garnishment of the debtor’s property for these still requires the bankruptcy court’s relief from the stay.
Take these steps
As to any caller attempting to collect from you any type of debt, even if it is their first time calling, you should do the following:
Tell them you’ve filed for bankruptcy: immediately inform the caller of your filing. This should stop most calls, although some bold callers may persist.
Document their phone call: keep a record of who called, when, and what they said. This information is crucial for stopping callers through legal means.
Consider taking legal action: retaining an experienced attorney is the most effective method for putting an end to harassing callers, illegal collection tactics, and creditors who defy the bankruptcy court’s stay order.
It is possible and even likely that the creditor did not know and will discontinue contacting you. Creditors who, with knowledge of the bankruptcy filing, violate the order by continuing the calls are a different matter; the court can slap them with penalties and sanctions, including actual damages in the form of out-of-pocket costs, emotional distress and the attorney’s fees required to vindicate the stay’s protection. A skilled attorney is a powerful tool in navigating the legal processes that convince courts into taking aggressive action on your behalf.
Use the law to your advantage
No one takes the decision to file for bankruptcy lightly. For most, the time leading up to the decision to file was challenging enough. The law affords you a break from crushing debt and the stress of incessant phone calls from creditors, and you deserve peace of mind. Let our knowledgeable team at the Law Offices of Jeffrey Lohman wage this battle for you. Whether it’s stopping harassing phone calls, or other questions you have about bankruptcy, contact us for help today.
The Law Offices of Jeffrey Lohman, P.C. is considered a debt relief agency pursuant to federal law. We are attorneys who help people file for bankruptcy relief under the Bankruptcy Code.