Stopping creditor harassment during or after bankruptcy
Unfortunately, if you owe debts, you may experience creditor harassment. If this occurs, you may already know that the Fair Debt Collections Practices Act gives you significant rights regardless of whether you decide to file bankruptcy. However, what happens if the creditor harassment occurs during or after your bankruptcy? Although this is significantly more rare, it does occasionally happen. Fortunately, you are protected against harassment during these times as well.
Harassment during bankruptcy
You may know that when you file bankruptcy, the automatic stay immediately prevents your creditors from taking any actions to collect debts. This includes calling you, repossessing collateral, filing a lawsuit against you or garnishing your wages.
Most of the time, creditors respect the stay and immediately cease all collection actions against you. Sometimes, however, a creditor will accidentally or deliberately violate the stay. If this occurs, you have several rights.
If a creditor violates the stay by repossessing collateral (which may occur for a delinquent car loan), you may ask the bankruptcy court to order the return of the property.
Additionally, for all stay violations, you can sue the creditor for any actual losses you suffered, if the creditor knew or should have known that the stay was in effect when the violation occurred. Also, you can recover all attorneys’ fees you incur for bringing the lawsuit. If the creditor’s actions were extreme, you may also be entitled to recover punitive damages and compensation for emotional distress (however, this is less common).
In addition to compensation, the bankruptcy court has the discretion to punish the creditor. Since the stay is a court order, creditors that violate the stay may be sanctioned for contempt of court and have to pay fines and court costs.
Harassment after bankruptcy
Once you have completed bankruptcy, many of your pre-bankruptcy debts have been discharged. This relieves you from having to pay them forever. Unfortunately, a few creditors may not obey the discharge order and take actions to convince you to repay them.
If this occurs, you have many of the same rights and protections that you do for stay violations. You can sue the creditor for any losses you suffered plus attorneys’ fees. Additionally, the bankruptcy court may punish the creditor for contempt.
Stand up for your rights
Creditor harassment during and after bankruptcy is less common, but it happens sometimes. If you are one of the victims of this type of harassment, it is in your best interests to consult with an experienced bankruptcy attorney as soon as possible. An attorney can work to stop the harassment and ensure that the creditor is held to account for their illicit behavior.