Filing for bankruptcy can be a difficult decision. While bankruptcy offers the promise of a fresh financial beginning, your decision to petition for Chapter 7 or Chapter 13 bankruptcy could make little impact on creditors’ impact to collect on your past-due debts.
However, once you have filed your initial petition, the court will grant an automatic stay on collections. This stay is intended to protect you from further creditor calls and harassment. Unfortunately, creditors do not always take court notices seriously. Even if they have been instructed to cease contact, they may still try to contact you, pressuring you into repaying debts you hope to soon discharge.
The Automatic Stay
After you have filed a petition for bankruptcy, the court will put an automatic stay in effort. The automatic stay will inform your creditors that they are no longer permitted to contact you about your debts. If a creditor continues to attempt contact over the phone, through email, text messages, or any other mode of communication, they may be in violation of New York law unless they have received a specific exemption from the court.
What to Do if Creditors Continue Calling You
While the courts will inform creditors of your intent to file bankruptcy, it may take several days to several weeks for creditors to receive the notice. You could attempt to curtail further contact by:
- Informing the creditor that you have filed for bankruptcy protection.
- Providing the creditor with your case number and the date the case was filed.
- Ask the agent for their name and position.
- After speaking to the creditor, not their name and the date they called for future reference.
How to Check if the Court Made a Mistake
The court is supposed to contact creditors on your behalf. However, in some rare cases, the court may have inadvertently sent notice of the automatic stay to the wrong address. If you are still receiving creditor communications several weeks after you have filed your petition:
- Review your copy of the automatic stay, which the court should have sent you by mail.
- Check the creditor’s address online or in a telephone book.
- Confirm whether the court sent notice to the correct address.
Even if the court sent a copy of the stay to the wrong address, you are still protected from further creditor calls and harassment. Inform the creditor that you have filed for bankruptcy and provide them with your case number and the date that you filed the petition.
What Happens if Creditors Deliberately Violate the Automatic Stay
If a creditor deliberately violates the automatic stay, the bankruptcy court could sanction the creditor for harassment. You do not have to prove that the creditor intended to violate the stay order. Instead, you only have to provide evidence that the creditor tried to collect debts after receiving notice of your bankruptcy filing.
The court could sanction the creditor if all of the following elements are fulfilled:
- The automatic stay was in effect when the creditor attempted to collect on the past-due debt.
- The creditor violated the stay order.
- The creditor was aware, or should have been aware of, the automatic stay order but still initiated communications.
- The creditor did not cease its attempts to collect after being informed that the creditor had filed for bankruptcy.
- The creditor intentionally tried to collect a debt.
You have the right to be free from creditor harassment as soon as you file for bankruptcy. The Alatsas Law Firm could help you curb creditor calls as soon as the court receives your petition, even if creditors have yet to receive notice of the automatic stay.