Filing for bankruptcy can be a life-changing decision that provides much-needed relief from overwhelming debt. However, the process can also be stressful and intimidating, especially if you’re worried about how your creditors will react to your filing.
Fortunately, there are laws in place that protect individuals who have filed for bankruptcy from harassment by creditors. In this article, we’ll discuss what these protections are and how they work.
The Automatic Stay
One of the most powerful protections provided by bankruptcy is the automatic stay. This is a court order that goes into effect as soon as you file for bankruptcy and prohibits most collection actions against you and your property.
The automatic stay stops all collection efforts including phone calls, letters, lawsuits, wage garnishments or bank levies initiated by creditors or debt collectors. It also prevents utility disconnections and evictions in some cases.
The automatic stay can provide immediate relief from creditor harassment and give you time to focus on your bankruptcy case. However, it’s important to note that there are some exceptions to the automatic stay such as criminal proceedings or child support payments.
Debt Collection Agencies
Debt collection agencies must comply with the Fair Debt Collection Practices Act (FDCPA), which outlines specific guidelines regarding how they may contact you after filing for bankruptcy. The FDCPA prohibits debt collectors from contacting you once they receive notice of your bankruptcy filing.
If a debt collector does contact you after being notified of your bankruptcy filing, they are violating federal law and could be subject to penalties. You should keep records of any such contacts so that you can report them to the court or an experienced Montgomery bankruptcy attorney if necessary.
Creditors have a bit more leeway when it comes to contacting individuals who have filed for bankruptcy. While they cannot initiate any new legal action against you during the automatic stay period – they can still send statements notifying you of any missed payments or other relevant information about your account status.
Once the automatic stay has been lifted or discharged as part of finalizing a Chapter 7 or Chapter 13 case – creditors will resume their normal course of business activities including calling consumers directly again!
Creditor Harassment Remedies
If a creditor violates the automatic stay or continues harassing you despite being notified of your bankruptcy filing – there are remedies available to help stop their actions.
You may file a motion with the court asking for sanctions against the creditor or debt collector responsible for violating the automatic stay. Sanctions could include monetary damages paid directly to you or even contempt charges resulting in jail time/fines. It’s important if experiencing harassment from creditors/debt collectors notify lawyer handling cases immediately so proper steps are taken towards protecting rights.
Additionally, if a creditor continues contacting you after receiving notice of your bankruptcy filing – contact an attorney familiar with consumer protection laws immediately! They can help evaluate whether any violations occurred under federal or state guidelines – advise on what next steps should be taken towards stopping future harassment!
Filing for bankruptcy is never easy but knowing what protections are available can help ease some stress associated with overwhelming debts! The automatic stay provides immediate relief from creditor harassment while debt collection agencies must adhere to strict guidelines outlined by FDCPA to ensure fair treatment throughout the process!