Filing for bankruptcy can be a stressful process for anyone. Unfortunately, these stresses can be made even worse by continued contact (or harassment) from third-party debt collectors.
However, thanks to the Fair Debt Collection Practices Act (FDCPA), third-party debt collectors are required to obey certain rules when calling to collect debt.
Collectors who solicit you unfairly or too frequently may be liable to charges based on the specifications outlined in the law. Continue below to see if your situation may allow you to take legal action during this time.
Bankruptcy’s Automatic Stay
When you file for bankruptcy, you declare to the government that you are unable to repay all debts currently under your name. From the point you file onward, you are covered by what is called an “automatic stay.”
This is put into effect to protect you from further solicitation regarding the debts you owe. This also means that the majority of creditors and collectors are prohibited from contacting you further about your debts. The only exceptions to this automatic stay rule are:
- criminal cases (which cannot be halted by bankruptcy),
- certain forms of child support (which can be addressed by other programs), or
- certain forms of eviction (which varies from case to case)
However, as a general rule of thumb, it is safe to assume that hearing from creditors or collection agencies after filing for bankruptcy is prohibited.
Courses of Action
Before taking immediate action, examine your case in comparison to your bankruptcy’s automatic stay policy to see if any transgressions are being made. Also be sure to factor in the number of days it has been since filing — chances are, if it hasn’t been long, then the creditors haven’t been notified about your case yet.
As a good first step, try to notify the collection agent(s) of your bankruptcy during your next phone call or email conversation. All creditors should be aware of automatic stay policies, so they should accept this and stop asking for payments on your debt. You can also call them in advance of filing for bankruptcy to alert them of the steps you’ll be taking.
If you continue to receive contact from collectors, you can then notify the bankruptcy court handling your case. If it can be shown that the collector was either ignorant or willfully neglectful of a person’s automatic stay, then the court can impose fines, order damage payments, or sanction the collector for violating a court order.
If a collector continues to violate your automatic stay, it is possible to file a lawsuit against their collection agency.
Contacting an Attorney
Dealing with legal issues in the middle of filing for bankruptcy can easily become overwhelming. While it may seem intimidating, speaking with an attorney may be the best course of action in your situation.
FDCPA attorneys are well-versed in all laws and rights related to debt collection. They can assess your situation, help file paperwork, stay in contact with officials, and represent you in court if necessary. Before taking action, consider a consultation with an FDCPA attorney today.