If you have fallen behind on your bills, you may already be familiar with the protections against abusive or misleading collection tactics under the Fair Debt Collections Practices Act. However, if you decide to file bankruptcy to deal with your debts, what protections do you have against creditor harassment?
How you are protected during bankruptcy
As soon as you file bankruptcy, the automatic stay goes into effect. As soon as this happens, creditors may not do anything to collect a debt you owe. This includes filing a lawsuit against you, attempting to repossess collateral or even making a phone call to you.
Although the majority of creditors obey the stay, a few may ignore it from time to time. If a creditor violates the stay by attempting to repossess collateral, you have the right to petition the bankruptcy court to order the return of it.
For all stay violations, you also are entitled to sue the creditor that violated the stay for damages. If the creditor knew or should have known that the stay was in effect, you can recover any actual losses that you suffered because of the violation. In addition, you may recover attorneys’ fees that you incurred for bringing the lawsuit. If the violation was extreme or outrageous, you may be entitled to punitive damages and compensation for emotional distress.
In addition to having to compensate you, any creditor that violates the stay is also subject punishment by the court for the violation. In such cases, the court has the option of issuing fines and assessments for court costs to the violator for contempt of court.
How you are protected after bankruptcy
Once you complete bankruptcy, the stay is lifted and you receive a discharge of some of your debts. However, some creditors may take this opportunity to contact you about debts that were eliminated during bankruptcy. However, since a discharge is a court order, this is illegal and is punishable by law.
When creditors violate the discharge order, you have many of the same rights as you do for automatic stay violations. Because of this, you may recover any losses you suffered because of the violation plus attorneys’ fees. Furthermore, the court may order the creditor to pay fines and court costs for contempt of court.
Think you are experiencing harassment? Get help
Although most creditors follow the law, there are some who do not. If you are experiencing harassment about debts before, during or after filing bankruptcy, contact an experienced bankruptcy attorney as soon as possible. An attorney can discuss your options and work to protect your right to be free of harassment guaranteed by law.
