When debtors file for bankruptcy without the help of an attorney they often run into troubles such as post-bankruptcy filing bank levies. One of the mistakes that pro se bankruptcy filers make when submitting their bankruptcy paperwork is forgetting to notify all of the parties involved in collecting their debt payments. For example, before filing for bankruptcy, many debtors have active lawsuits or lawsuits that have ended in a default judgment giving creditors the power to garnish wages and seize their bank accounts via bank levies. Most times the entity directly involved with the lawsuit against the debtor is not the same as the original creditor, especially if the original creditor is a credit card company. Therefore, even if the debtor remembers to notify the original creditor of the bankruptcy filing the debt collection agency and attorney coordinating the lawsuit are often not aware and may go ahead and levy their bank account, wiping the debtor out.
When bankruptcy attorneys file on behalf of their client, they do the following:
- The bankruptcy attorney will procure the name of the law firm or attorney handling the lawsuit against the debtor and find out which court the lawsuit is being held in.
- The bankruptcy attorney will then notify in writing all parties involved in the lawsuit so that the bank levy will be stopped.
- If a bank levy is in the process, the bankruptcy attorney will also find out which Sherriff department is responsible for serving the levy and notify them of the bankruptcy filing.
Even if the creditor has won a lawsuit and is a few days away from seizing your assets at the time that you file bankruptcy, they must abort all collections activity after you file bankruptcy. But they will not do that if they are not aware of the bankruptcy filing. However, there are some creditors who attempt to get around the automatic stay in bankruptcy and will seize bank accounts anyway in the hopes that the debtor who is not working with an attorney will not have the knowledge necessary to combat this type of abuse.