Enforcing your Bankruptcy
Harassment After Case is Filed or After Case is Discharged
Enforcing your Bankruptcy case against creditors can refer to two different scenarios. A “Stay Violation” and a “Discharge Violation.” A creditor violates your “Stay” when they continue to contact you (phone calls, letters, etc.) after your case has been filed. A creditor violates your Discharge when they continue to attempt to collect on the debt after your case has been discharged.
Stay Violation – When Creditors Harass After the Filing Date
As soon as your Bankruptcy case is filed, you are entitled to relief from creditors. This means that no creditor is allowed to contact you in an attempt to collect on a debt that was listed in your bankruptcy (all debts are supposed to be listed). The creditors are not allowed to call you, send you collection letters, draft your bank account, sue you, or show up at your house. But what if they do one or more of these things? Then they have violated your automatic stay. “Stay” means stop. Creditors are supposed to stop all collection activities once your file your case.
Stay Violations are Strict Liability
In an age where banks and collection agencies use auto-dialers and form collection letters, it is actually quite common for them to violate your stay. But it does not matter if they do it on purpose or by accident. If they violate your stay, they are liable. So what does this mean for you? It means that your lawyer can sue them and they have to pay you money. If your bankruptcy lawyer does not do these kinds of cases, get on the internet and find one that does “Stay Violations”. Depending on how egregious the stay violation was (multiple phone calls, name calling, etc.), you may be entitled to thousands of dollars of damages.
Gather Evidence of Stay Violations
If your stay is being violated, do not just complain to your lawyer. Your lawyer needs evidence. Write down every singe phone call you get from a debt collector (date, time, conversation, etc). Try to record the calls if you can. Save any voicemails they leave you. And save any collection letters or statements that continue to come to you in the mail. Most lawyers give the creditors about a month to stop sending collection letters, but phone calls must stop immediately.
Discharge Violation – When Creditors Harass After the Discharge Order
After you receive your Bankruptcy Discharge and your case is done, the automatic stay is removed. You do not need it anymore, because you are protected by your Discharge Order. The Discharge Order is a powerful federal court order that says all the creditors discharged in your bankruptcy may never contact you ever again to try to collect on those debts. The creditors have to remove themselves from your credit report, stop pulling your credit report (an impermissible pull), and never contact you about the debt. But I’m sure you can guess… it is quite common that they do it anyway!
Discharged Creditors have 60 days to come off your Credit
Most bankruptcy judges will consider it a Discharge Violation if creditors are still reporting that you owe them a balance 60 days or more after you receive your discharge order. For this reason, 60 days after you receive your discharge order, you should go to www.annualcreditreport.com and pull your 3 credit reports separately. The discharged creditors are required to report a “zero” balance. But if they are still reporting that you owe them money, then they are liable for violating your discharge. They are also liable if they have been pulling your credit report after your discharge. Show these credit reports to a Bankruptcy Attorney who does “Discharge Violations.” Settlements on these kinds of cases range into the thousands of dollars.
Debt Buyers illegally buying Discharged Debt
Once your debt has been discharged, the creditor should just throw away your file and quit thinking about you, right? Well, what if they can squeeze a little bit more money off the situation by selling your discharged debt, illegally, to a debt buyer, for pennies on the dollar. This happens. Sometimes years after your discharge, a debt buyer will put a debt on your credit report that was in your bankruptcy, or they will contact you to collect on it. Do not put up with this! Gather as much evidence as you can, and go see a bankruptcy lawyer so you can sue them for violating your Discharge Order. Until a sufficient number of consumers sue debt buyers and banks for this kind of activity, they will just keep doing it.