For borrowers who are struggling to keep up with their debts or who have fallen behind, bankruptcy provides some much needed protection from creditor harassment. If a creditor continues collection actions against you, even after you have filed for bankruptcy, the creditor may be violating your rights and the protection you are granted when you file for bankruptcy.
Creditors, such as credit card companies, banks, and other financial institutions can pursue you to collect a debt up until you file for bankruptcy. After that, they should no longer be able to reach out to you in an attempt to collect a debt. Even if the financial institution charged off your debt and sold it to a debt buyer, all communication should cease. This guard is known as an automatic stay, which is a court ordered protection designed to prohibit creditors from contacting you during your bankruptcy petition.
Unfortunately, some creditors violate this protection and still pursue debtors even after they have filed for bankruptcy. Below are some options available to you:
• Advise the creditor of your bankruptcy. By directly informing the creditor that you have obtained bankruptcy protection, this may cause them to stop future violations. There is the possibility that the collector was unaware of your case (either through negligence or error).
• Notify the bankruptcy court. If the creditor fails to stop contacting you and continues to make violations, you should notify the bankruptcy court. At this point, the court can sanction the collector for violating its automatic stay order if the collection action is “willful.” This is done under the court’s power of contempt, which means that the creditor has violated the court’s order. After that, the creditor can face fines, including attorney’s fees, and damages.
• File a lawsuit. If the violations continue, the creditor may be guilty of violating additional state and federal laws. These include the Fair Debt Collection Practices Act, or FDCPA and the Fair Credit Reporting Act. In the state of Florida, it may also violate the Florida Consumer Collection Practices Act, or FCCPA.
Once your bankruptcy is complete and your debts have been discharged, you also have protection from creditors trying to collect on that debt. When a debt is discharged, it means you no longer need to pay that debt collector; therefore the creditor should not be contacting you to collect. Like the automatic stay, creditors who violate this may be required to pay you for the violation, including additional legal costs.
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
Source:
http://www.nolo.com/legal-encyclopedia/creditor-trying-collect-debt-during-bankruptcy.html
http://bankruptcy.lawyers.com/consumer-bankruptcy/automatic-stay-violations-and-creditor-consequences.html
