Creditor Harassment: Can Filing for Bankruptcy Help?
Once you are even a few days late with a payment to a creditor, you are going to start getting phone calls and emails reminding you to pay. You may get daily calls – or you may even be called several times a day (particularly if you don’t answer the phone). The longer the debt is past due, the more frequently you will be contacted, and the more aggressive the creditors will be.
Filing for bankruptcy can put an immediate end to creditor harassment. Here’s how:
The Automatic Stay
As soon as you file for bankruptcy, whether it’s Chapter 7 bankruptcy or Chapter 13 bankruptcy, an automatic stay goes into effect. The automatic stay puts a stop to any collection efforts while your bankruptcy is being processed. That means that creditors cannot call or email about your debt, nor can they send you anything in the mail. They also cannot continue with any legal action, including a lawsuit, foreclosure, eviction, or repossession.
You should not face any harassment from creditors after you file, nor should you be contacted by them at all.
Length of the Automatic Stay
The automatic stay remains in effect until the bankruptcy is resolved, whether it is rejected or finalized. Typically, a Chapter 7 bankruptcy will take a few months to resolve, and a Chapter 13 bankruptcy will take three to five years, or the length of the repayment plan.
Creditors cannot continue to try to collect on a debt after the bankruptcy is finalized if the debt was discharged. Creditors with a secured debt, like mortgage lenders, will continue to collect on what you owe after your bankruptcy is resolved.
Notice of the Automatic Stay
You do not need to do anything after you file for bankruptcy to let your creditors know that an automatic stay has gone into effect. The bankruptcy court will notify all of your debtors that you have filed for bankruptcy, so you don’t need to do anything at all.
If you are contacted by any of your creditors during the first few days after filing, it’s possible that they just didn’t get the notice or they haven’t updated their call records. Just let the creditor know that you have filed for bankruptcy and refer them to your bankruptcy attorney. If you continue to be contacted by creditors, let your Gilbert bankruptcy attorney know. You can take action against these creditors.
Limitations to the Automatic Stay
There are some exceptions to the automatic stay. The stay cannot put a stop to child support payments (or collection on back child support), alimony, or anything involving a criminal prosecution. Other creditors may petition the bankruptcy court to be exempt from the automatic stay. Creditors must show that the stay interferes with their interest in the property.
Your Gilbert bankruptcy attorney can help you understand a creditor’s case if they file for an exception. Your attorney can also argue for your interests and help to block the exception, depending on the circumstances.
Consult with a bankruptcy attorney in Gilbert to learn more about how bankruptcy will help you get debt relief and how the automatic stay can help you get relief from creditor harassment. Your lawyer will help you know what actions creditors cannot engage in and what you should do if creditors violate these rules. Your attorney is your advocate and your guide through the bankruptcy process, and they can answer all your questions about creditor behavior or other aspects of bankruptcy, as well as help you know what actions to take if you are the victim of harassment.
Gilbert Bankruptcy Lawyers are ready to help you get the debt relief you need through bankruptcy. We will review your finances and help you understand the benefits you can get from either Chapter 7 bankruptcy or Chapter 13 bankruptcy. Or, if you own a business, we can help you understand your options for business bankruptcy. Our goal is to help you be free of as much debt as possible so that you can start rebuilding your finances and your life quickly. Call our bankruptcy law office in Gilbert today to meet with a bankruptcy lawyer and to review your debt relief options.