Bankruptcy and Creditor Harassment during and after filing Bankruptcy

People who are in debt are likely use to receiving constant phone calls and mailings from creditors. However, once a person files for bankruptcy this constant contact should come to a halt. If you still receive phone calls and mails from a creditor this, may be a form of harassment and you have certain rights.

Under U.S. Law, when a debtor files for bankruptcy one benefit he or she receives is creditors must stop all collection efforts against the debtor. Creditors who try to collect a debt during a bankruptcy or after a discharge is in violation of Federal bankruptcy law. When a bankruptcy is filed, an automatic stay prevents most creditors from continuing collection actions against a debtor. A debtor who continues to be contacted by a creditor, should contact their attorney’s office so the attorney can warn the creditor of a potential violation of the debtor’s automatic stay. The debtor should keep the mailing received or make a record of the phone call.

If the creditor continues to send notice of the debt to the debtor after being warned, the creditor can be dragged in front of a bankruptcy judge. This form of harassment is illegal, and no judge will be happy a creditor continued to contact a debtor after being notified of a bankruptcy filing. A judge will often order the creditor directly to stop.

Debtors who are harassed in this manner are usually not awarded that much in damages. Often the debtor only receives attorney’s fees, which means the attorney gets paid for getting the creditor to stop the harassment.

There is also protection for people, who are in debt, but have not yet filed for bankruptcy. The Federal Trade Commission (FTC) sets the rules for how creditors should interact with people who owe money. This act protects debtors by prohibiting creditors from demanding a debtor pay more than they actually owe. It also prevents them from adding additional fees to a loan agreement, physically hurting a debtor, calling a debtor during unreasonable hours, or even contacting a debtor’s employer or neighbors.

One way to prevent harassment from creditors is to call them and create some sort of repayment plan. This can prevent not only the constant phone calls and mail, but also stop the creditor from turning the bill over to a collection agency. Another way to prevent creditor’s nagging is for the debtor to request the bill collector to stop contacting him or her. Once the creditors receive a letter from the debtor notifying them of this, the creditor should cease contact for a while.

For more information on your rights as a debtor, contact a bankruptcy attorney at the Law Office of David M. Goldman PLLC. We offer free initial consultations in many practice areas including bankruptcy.