Creditors are required under federal bankruptcy law to immediately cease all collection efforts after you file for Chapter 7, 11 or 13 bankruptcy. An automatic stay is issued upon your declaration of bankruptcy that, among other things, protects you from creditor harassment.
There is a chance, though, that some creditors either didn’t get the memo that you’ve filed for bankruptcy, or that they’ll just continue to harass you for payment regardless. Creditors typically have their collection efforts managed by a third-party collections agency or attorney—they don’t usually have people in-house handling collections for them. Most of these collections agencies don’t work with attorneys, they just continue calling or mailing you to bother you for payment. There are some that do work with attorneys, though, and they may attempt to file a lawsuit against you so they can obtain a judgment and garnish your wages.
So, what happens if you still have creditors bothering you after you’ve filed for bankruptcy in violation of the automatic stay?
Know your rights
There are certain steps and actions creditors are not allowed to take. The Fair Debt Collection Practices Act and the Fair Credit Reporting Act both protect consumers against unfair creditor and collection practices. Here are just a few examples of things creditors are legally forbidden from doing:
- Call after 9 p.m. or before 8 a.m.
- Publish your name to publicly “out” you for your debt
- Use deceit or threats of any kind if they cannot follow through on them (such as lawsuits or additional fines that they cannot technically levy)
- Repeatedly call you (there are limits to the number of times in a day a creditor can call)
- Call family, friends or employers to make them aware of your debts
- Call you at work if you have requested not to be called while at work
- Threaten to arrest you or make threats about your child custody
- Threaten to terminate government benefits like welfare or Social Security
- Use obscene language or insults
In addition, if you have already filed for bankruptcy, you are likely working with a bankruptcy attorney in Montgomery County, TX. In this case, the creditor is required to contact you through your attorney only. They may not contact you directly, and if they do, you should make sure your attorney knows. Do not talk to your creditors at all—let your attorney handle it.
Continued harassment should be reported to your attorney, who can then follow up with a certified cease-and-desist letter, demanding they cut off all contact with you. If they then continue to call, your attorney can file a lawsuit against them, and you could recover damages as a result of the creditor’s illegal acts.
If you’ve already filed for bankruptcy, you should be sure to note every instance of harassment so you and your attorney can take them to court.
Do keep in mind that some creditors might legitimately be unaware you have filed for bankruptcy. You do not need to take them to court immediately. You may find that simply informing them of your bankruptcy proceedings will end the calls and letters.
For more information, contact a bankruptcy attorney in Montgomery County, TX today.