Can Bankruptcy Prevent Creditor or Debt Collector Harassment?

For many Americans who are struggling with debt, one of the most difficult aspects of owing money is the constant contact from creditors and debt collectors. Even though consumers do have clear rights outlined in the Federal Debt Collection Practices Act (FDCPA), which include limitations on the times at which a debt collector can call and the ability for a debt collector to contact debtors at their places of employment, many people who owe substantial consumer debt still face seemingly relentless phone calls, emails, and other forms of communication from creditors or debt collection companies. If you are in this situation, you might be wondering: can consumer bankruptcy prevent creditor or debt collector harassment? Or, in other words, can filing for bankruptcy stop these creditors or debt collectors from engaging in this kind of constant contact?

In short, the answer is yes due to the automatic stay in Chapter 7 and Chapter 13 bankruptcy cases. We want to provide you with more information about how the automatic stay works, as well as to tell you about other options for dealing with debt collector harassment.

Automatic Stay Prevents Contact and Action From Creditors and Debt Collectors

Whether you are considering Chapter 7 bankruptcy or Chapter 13 bankruptcy, you should know that the automatic stay will apply to your bankruptcy case as soon as you file. The automatic stay is among the most powerful tools of bankruptcy because it stops any action by creditors or debt collectors, from phone calls to legal steps. According to the Cornell Legal Information Institute, you should know that the automatic stay is “an automatic injunction that prohibits most creditor collection activities after the debtor has filed for bankruptcy.” Indeed, “the stay begins at the moment the bankruptcy petition is filed,” and a creditor can only take action against the debtor by petitioning the court and proving that its “interest in collateral is not adequately protected.”

In sum, as soon as you file for bankruptcy, the automatic stay stops creditors and debt collectors from doing any of the following:
  • Making contact with you to try to get you to pay the debt you owe;
  • Filing a lawsuit against you;
  • Moving to garnish your wages or your bank account; or
  • Repossessing property.
Creditors and debt collectors can face serious consequences if they continue taking actions to collect debt, including even phone calls, once the automatic stay is in place.

Protections Against Harassment by Creditors and Debt Collectors

Even if you do not file for consumer bankruptcy, you should know that the FDCPA provides protections against harassment by creditors and debt collectors. If you do face harassment, you may be eligible to file a claim. However, it will be essential to seek advice from a consumer protection attorney about the type of contact you are facing from a debt collector and whether it rises to the level of harassment under the FDCPA.

Seek Advice from an Oak Park Bankruptcy Lawyer

Do you have questions about the automatic stay or the benefits of filing for consumer bankruptcy? One of our experienced Oak Park bankruptcy attorneys can assist you. Contact the Emerson Law Firm to learn more about how we can help.



See Related Blog Posts:

What Should I Expect After I File for Chapter 7 Bankruptcy?

Bankruptcy and Disability Benefits: What You Should Know

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