Creditors Still Calling With Automatic Stay? Know Your Rights
The phone rings, and your stomach drops. It’s another creditor, even though you just filed for bankruptcy. You’re not alone. Many people face creditors still calling with automatic stay in place, leaving them feeling confused and anxious. This frustrating situation can leave you wondering about your rights and how to stop the calls.
Filing for bankruptcy can bring a sense of relief, yet the stress of dealing with debt collection doesn’t always vanish instantly. The American Psychological Association (APA) highlights how stress impacts your whole body. It’s not just about the bills; it’s about how persistent calls impact your wellbeing during an already difficult time. The automatic stay is designed to protect you from this harassment, but it’s sometimes not completely foolproof against aggressive or misinformed creditors. Creditors still calling with an automatic stay can turn that initial relief into renewed stress and uncertainty.
Understanding the Automatic Stay
The automatic stay, put simply, is a legal order from the bankruptcy court that acts like a protective shield. It stops most creditors from trying to collect debts you incurred before filing. This means no more calls, letters, emails, lawsuits, or even wage garnishments.
It goes into effect as soon as your bankruptcy case (petition) is filed. Whether you choose Chapter 7 or Chapter 13, the Bankruptcy Code sets clear guidelines. These rules stop most collection activity, providing space for you to reorganize your finances.
Why Are Creditors Still Calling With Automatic Stay Active?
Several reasons explain why you might still receive collection calls. Mistakes happen. Sometimes the court’s notice to your creditors hasn’t been fully processed, or an incorrect address was provided. It is unusual but it does happen, sometimes unscrupulous debt collectors will continue collections, violating the automatic stay.
Another reason creditors continue collections is because you might have forgotten to include a debt. Maybe you’ve received that official court notice and you suddenly realize there was an additional creditor you forgot to include. In that case, prepare and file and amendment (Schedule F) to your bankruptcy schedules, so that creditor receives copies of future notices.
Sometimes, debt buyers purchase discharged debt, hoping you’ll pay out of confusion or pressure. A creditor may claim the discharge doesn’t apply to them if they weren’t listed in the original bankruptcy paperwork. A similar tactic is sending ambiguous collection letters suggesting settlement, without directly claiming you’re legally obligated to pay.
What To Do When Creditors Continue Contact
So, what can you do if creditors still calling with automatic stay protection active? Answer the phone, firmly but politely inform them of your bankruptcy filing. Give them your case number and filing date. Document everything—the creditor’s name, the date and time they called, and the representative’s name.
Verify Addresses: Double-check if the creditor’s mailing address on your paperwork matches the information you gave the bankruptcy court. An incorrect address might explain the calls. Incorrect mailing addresses, unfortunately, are a known challenge with creditors, according to examples documented within the Consumer Financial Protection Bureau’s database.
Notify Your Attorney: Share all collection attempts with your attorney. They can often resolve this through a simple letter to the creditor. Sometimes, legal action in bankruptcy court is necessary. This legal action holds the creditor accountable and aims for compensation due to harassment.
Protecting Yourself From Future Harassment
Monitoring your credit report post-bankruptcy can catch issues. The Fair Credit Reporting Act demands that credit reporting agencies investigate and correct any discharged debt incorrectly listed. It’s important to monitor your reports so that if the bankruptcy discharge is impacting your ability to be granted a mortgage, open a credit card account, or secure employment, you can take steps to remedy the situation.
Here’s what I recommend doing as proactive protection if, unfortunately, your case involves creditors still calling with an automatic stay order. Keep your discharge order handy. It’s concrete evidence that these debts are discharged.
Conclusion
Facing creditors still calling with automatic stay is not unusual, and having a grasp on the reasons this might occur and taking immediate and correct steps for effective mitigation becomes critical in such situations. You are under no obligation to tolerate this stress. Don’t hesitate to communicate firmly with creditors about your rights. It is especially crucial in a situation such as a global corporate crisis as experienced over recent years during which several bankruptcy events involving major debt levels may have left certain debtors uncertain and concerned for themselves and families. Seeking legal help, especially from a bankruptcy attorney will strengthen your position, especially if you are seeking compensation for harassment.
Navigating this aspect of bankruptcy can feel overwhelming. But by understanding your rights and being proactive, you can regain control and peace of mind. Request your free consultation with The Law Office of William Waldner to learn more about the automatic stay and how it can help you.