How Declaring Bankruptcy will help end the annoying phone calls from creditors:
Transcript
One of the first things that gets asked by clients when they come in and talk to me is, can I stop the annoying and harassing phone calls from all these creditors and will a bankruptcy stop these creditors from calling me? The answer is yes. The moment we file for bankruptcy, a law called the automatic stay goes into effect. Think of the automatic stay like a big collections freeze. It applies to virtually any and all creditors seeking to engage in any type of collection activity. That includes phone calls. Now there are certain circumstances in which the automatic stay may not go into effect. If, for example, you have a couple of recent bankruptcies that you filed earlier in the year that were unsuccessful and were dismissed, in those situations the automatic stay won't go into effect. If you have one previous dismissal, the automatic stay will expire after 30 days. You want to be very careful that you're aware of the limitations of the automatic stay.
Another situation where the automatic stay may come up a little bit short is in certain situations, creditors can ask for relief from the automatic stay where they essentially file a motion with the bankruptcy court and ask the bankruptcy court for permission to engage in collection activities against you. These situations are usually limited to secured creditors such as a mortgage company or a car company that has a loan in your name, and you haven't been making the payments on that loan. From a practical standpoint, if we're just talking about phone calls and stopping them, the automatic stay goes into effect immediately upon filing a bankruptcy, but the notice of the bankruptcy doesn't get sent out to these creditors until a few days have past. When we file your bankruptcy, we have a big list of your creditors along with their addresses. Then the bankruptcy court mails out notices of your bankruptcy filing to these creditors. The mailing may take a few days to get to these creditors and for them to update their systems before they actually are aware that you have actually filed for bankruptcy.
Now if the phone calls are annoying, and you want them to cease immediately, there's definitely the opportunity to tell these creditors that you've filed for bankruptcy, provide them with your bankruptcy case number, give them your attorney's contact information and let them know that they are not allowed to contact you directly. This should be sufficient to get the phone calls to stop. If for whatever reason that doesn't stop the phone calls, involve your attorney. Have your attorney make the phone call directly to these creditors. That's usually enough then to get their attention and get them to stop. If all of this fails and for whatever reason there's a creditor that's not willing to honor and comply with the federal law of the automatic stay, you have the option of asking the bankruptcy court to issue sanctions against a creditor who is particularly unruly and unwilling to follow the federal law.
I suggest that you consult with a bankruptcy attorney that has experience in these issues and that is familiar with your protections that are available to you by filing for bankruptcy. Your attorney will make sure that you get the very protection that's available under the law.
