Many people considering filing bankruptcy have severely
fallen behind on payment of their debts, and receive endless collection calls.
Some people have fallen so far behind that the creditors have sued them, and
have obtained, or soon will obtain, garnishments and liens. We are often asked
whether filing bankruptcy will stop these collection calls and garnishments, or
if they will have to wait until they actually receive their discharge.
Filing bankruptcy places the debtor under the protection of
the automatic stay, which prohibits all creditors, with limited exceptions, who
received notice from all collection activities. The automatic stay protects the
debtor from all collection calls, and stops any pending garnishments. Any money
taken by a creditor after the date of the filing must be returned, even if they
creditor wasn’t aware of the filing when they took the funds. In some
circumstances, we may be able to recover funds garnished prior to the filing of
the bankruptcy.
Even after we have informed clients and prospective clients
of these protections, we are frequently asked what happens if the creditors
simply ignore the bankruptcy notice and continue collection efforts. The short
answer is: they must! Except for particularly egregious violations, we will
give creditors the benefit of the doubt, and assume they simply did not receive
or process the bankruptcy notice. We will send the violating creditor a letter
notifying them of the bankruptcy, and demand that they cease all further
collection efforts. If this fails to stop collection efforts, we may send an
additional warning or file a complaint in bankruptcy court. If we file a
complaint in bankruptcy court, the debtor may be entitled to damages, attorney
fees and costs. The filing of a complaint will often solve the problem, but it
is possible that a hearing may be required to establish the violation.
If you are, or will be, behind on your bills, at threat of
garnishment, and receiving endless, harassing collection calls, you should
consider calling us to discuss your debt relief options. Initial consultations
are free. Call 503-352-3692, or visit www.pacificbankruptcy.com
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