If you’re considering filing for bankruptcy, or have decided to file for bankruptcy, it’s a virtual certainty that you’ve been on the receiving end of debt collection calls. You’ve likely endured more than your share of abusive debt collectors and threatening letters from debt collection agencies. Many consumers don’t realize that filing for bankruptcy puts a virtual stop to debt collection activities, and that there are penalties when debt collectors cross the line.
When someone files for bankruptcy, a trustee is assigned to determine the parties who might have claims against the consumer. To do this in an orderly fashion, bankruptcy laws typically put a halt to non-criminal legal proceedings. According to the law, debt collection efforts must stop when a person files for bankruptcy, something called an automatic stay. Creditors and debt collection agencies must use the bankruptcy proceeding to make a claim against the consumer’s assets, and are forbidden to use traditional debt collection tactics to go after the consumer. This means, for example, that a person’s car can’t be repossessed, that their property can’t be foreclosed upon, and that a debt collector can’t take them to court in order to get a judgment to, for example, garnish their wages or seize their bank account.
If you’ve filed bankruptcy, the automatic stay protects you from debt collection calls, letters, and legal actions from creditors or debt collectors – once the creditors and debt collectors are made aware of the stay. If creditors and debt collectors willfully violate the automatic stay, you have the right to sue them in court. If you win the case, the creditor or debt collector can be ordered to pay you actual damages, along with court costs and attorney fees. If the violations of the automatic stay are considered egregious, you may also be awarded punitive damages.
In order to recover damages from a bankruptcy stay violation, a few conditions need to be met. First, the stay must be in place. Second, one needs to prove that the creditor or debt collector knew about the stay or failed to rectify the situation once they were informed of the stay. Third, one needs to prove that the creditor or debt collector violated the stay. Fourth, one needs to prove that the creditor or debt collector intended to take action against you (for example, by calling you to collect a debt, filing a lawsuit against you, repossessing your vehicle, etc.)
If you’ve been the victim of a bankruptcy stay violation, complete the form to the right for a FREE evaluation, or call (toll-free) 855-301-8100. The legal team at Lemberg & Associates is committed to holding debt collectors accountable, and will fight for your rights under bankruptcy laws.
