Financial hardships are stressful enough without having to deal with the letters, emails and incessant phone calls from creditors and their representatives demanding repayment of debts owed. Debt collector harassment can be intolerable, sometimes bordering on illegal. How then can bankruptcy help stop the torment and irritation of creditors calling at all hours of the day and night? Let’s examine how the process of bankruptcy can help this situation.
Bankruptcy is a process that allows for debtors to start anew and gain a clean slate when it comes to their finances. Once a debtor files a bankruptcy, whether it is chapter 7 or chapter 13, an automatic stay prohibits almost all collection activity, including legal action, garnishment, and even contact by phone or mail in an attempt to collect a debt.
There are some exceptions however to the automatic stay. While the automatic stay is very broad and applies to nearly every attempt to collect on a pre-bankruptcy debt, there are a few exceptions. For instance, the automatic stay does not stop criminal cases, some child support actions, and certain eviction cases. The automatic stay does not apply to debts incurred after the bankruptcy case was filed.
If a creditors continues to call, email or contact you in any way after the automatic stay, the company may be in violation of the law. There are several options if a creditor continues its collection actions against you in violation of the automatic stay.The first option includes informing the company about the bankruptcy. In many cases they may not be aware of the court case. If this does not work, notify the bankruptcy court and a sanction can be put on the creditor. The court can sanction the collector for violating its automatic stay order if the collection action is “willful.”
Talk to your bankruptcy attorney who can guide you through this process and eliminate all the harassing phone calls and emails in regard to your debt.