When Creditors Try to Collect During Bankruptcy


When Debt Collectors Try to Collect During Bankruptcy

If you have filed for bankruptcy and a creditor continues to try and collect from you, they could be in violation of the automatic stay . The purpose of the automatic stay in bankruptcy is to stop collection activity by creditors, including various forms of legal action such as wage garnishment . In most cases creditors are prohibited from contacting you by mail or phone regarding collection for a debt.

In many situations, it is important to understand how the automatic stay is applied and how it affects your case since it may have a varying effect. The automatic stay, in some cases, may not stop certain collection activity.  This may include cases related to criminal activity, certain actions related to child support and certain cases related to taxes. You should also be aware that debt incurred after you filed bankruptcy is not affected by the stay.

Unless the bankruptcy court has done any modification to the stay or decided to terminate it, a creditor could be violating the stay.  The first thing to do is make sure your creditor is aware that you filed bankruptcy as  it is possible they are unaware of the filing. If a creditor continues their collection attempts you’ll need to notify the bankruptcy court. The court may sanction the collector if they determine the automatic stay has been violated and the creditor could be forced to pay a fine and attorney fees.