What if a Creditor Violates the Bankruptcy Automatic Stay?

Do creditors stop calling if I file for bankruptcy

Once you file for bankruptcy, an automatic stay goes into effect. This order prohibits your creditors from taking any steps to collect on the debts you owe.

Most creditors respect the automatic stay, stopping their collection actions immediately upon receiving notice from the bankruptcy court, as they know about the consequences of ignoring the order. But, that isn’t to say that violations never happen. Read on to find out what to do if you’re contacted about a debt after filing for bankruptcy.

Actions that Are Allowed After the Automatic Stay Takes Effect

The automatic stay in bankruptcy puts a stop to creditor phone calls, texts, emails and letters. It also halts wage garnishments, utility disconnections and lawsuits for nonpayment of debt. However, the order doesn’t ban all adverse actions. The exceptions to the rule include:

  • Collection of child support and alimony
  • IRS audits and tax assessments
  • Fines incurred as a result of criminal proceedings
  • Actions to collect on pension loans
  • Debts acquired after filing for bankruptcy

Keep in mind, too, that a creditor can ask the bankruptcy court to lift the automatic stay. If the motion is granted, they can resume their efforts to collect on the debt you owe.

How to Handle a Violation of the Bankruptcy Automatic Stay

If one of your creditors contacts you after you file for bankruptcy, check to make sure the debt was included on your bankruptcy petition. In the event that particular creditor didn’t make the list, an experienced bankruptcy attorney may be able to correct the problem.

If, on the other hand, you did list the debt on your petition, you’ll need to make sure the creditor knows about your bankruptcy. The contact may have been inadvertent, as mistakes do happen. Provide the creditor with your case number along with the date and court where you filed – all of which can be found on any of your court documents – and you can expect no further contact.

Holding a Creditor Accountable for Continued Violations

Your creditor isn’t likely to reach out to you again after learning about your bankruptcy. But, there’s a chance that they could – and if you’re contacted again, you can take action.

If you’ve given the creditor the information they need to verify that you filed for bankruptcy, you’ll have the ammunition you need to prove that they willfully violated the automatic stay. To hold them accountable, you can file a motion with the court or, for continued violations, file a full-blown lawsuit.

Whether you’ve already filed for bankruptcy or are thinking of doing so, the Law Office of Davis & Jones, P.C., can provide you with expert legal assistance. To schedule a free bankruptcy attorney consultation, contact our office in Salt Lake City, Utah, today.