Filing for bankruptcy can often remove the burden of mounting debt. It also provides federal protection from creditor calls and letters regarding your past-due bills.
Review the bankruptcy provisions that help stop the anxiety, stress and inconvenience caused by aggressive creditors.
What is an automatic stay?
When you file for bankruptcy, the bankruptcy court issues an automatic stay. This court order stops pending legal actions such as foreclosure and bars letters, phone calls and other attempts by your creditors to collect. In addition to foreclosure, the automatic stay can prevent eviction, liens, utility shutdown and wage garnishment.
Some creditors can continue to contact you even after a successful bankruptcy filing. The automatic stay does not cover:
- Fines, court fees and penalties resulting from a criminal case
- Loans you took from your pension or retirement fund
- Past-due spousal support and child support
- Most types of tax debt
- Student loan debt
What if creditors keep calling?
Not all creditors will abide by the terms of the automatic stay. If you continue to receive creditor calls, consult with your bankruptcy attorney. He or she will confirm that you received a discharge and subsequent automatic stay for the debt in question. If the automatic stay is valid, the attorney will send the creditor a formal cease and desist order.
If the creditor does not stop calling or sending letters even after contact from your attorney, you may be able to file a legal claim through your bankruptcy case. If you have a valid complaint, the court can pursue sanctions against the creditor violating the automatic stay.