Your Protections Against Creditor Harassment During and After Bankruptcy

If you have ever gotten behind on your bills, you are likely aware of the tactics used by creditors to encourage you to become current on your bills. Everything from phone calls to strongly worded letters are routinely used. Unfortunately, sometimes the tactics can cross the line into harassment.You may already be aware of your protections against creditor harassment offered to you whether or not you file for bankruptcy (e.g., the Fair Debt Collection Practices Act). However, if creditors harass you during bankruptcy or after it has been completed, what are your rights?

Protections During Bankruptcy

From the day that you file bankruptcy, you receive one of the greatest protections available against creditor harassment — the automatic stay. While the stay is in effect, creditors are prohibited by law from continuing to collect debts against you. Everything from suing you for the money to placing collection calls to you is not permitted.

However, sometimes creditors will violate the automatic stay by taking actions to collect the debt. If this happens, any action that they take (e.g., repossession of your car) is void and may be reversed by the bankruptcy court. Under the law, the bankruptcy court can order the return of any of your property that was sold or taken away from you by your creditors.

In addition to having your property returned, in some cases you have the right to sue the creditor for damages if he or she violated the stay. Under the law, if the creditor knew (or should have known) about the automatic stay and continued his or her collection activity nevertheless, you may recover any damages you suffered and attorneys' fees. In egregious cases, you may also be entitled to punitive damages or damages for emotional distress.

Creditors who violate the automatic stay have violated a court order. As a result, they can also face contempt of court sanctions and be ordered to pay fines and court costs.

Protections After Bankruptcy

One of the benefits of bankruptcy is that once you have completed the process, you receive a discharge that relieves you of most of the debts that you had before you filed. Despite the fact that you are not legally required to pay this debt, creditors sometimes may restart their attempts to collect this debt after you have received a discharge.

Since a discharge is a court order like the automatic stay, if this happens, you have the right to petition the bankruptcy court to hold the creditor in contempt for violating the discharge. If the court finds the creditor in contempt, it can order the creditor to obey the discharge and pay fines, court costs, attorneys' fees and compensatory damages.

An Attorney Can Help

Creditor harassment should not be tolerated before, during or after you file for bankruptcy. If you are being harassed because of a debt, it is important to assert your rights. An experienced bankruptcy attorney can work to stop the harassment and recover all damages that you are owed under the law.