How to Stop Creditor Harassment During Bankruptcy

 Dealing with creditor harassment can be one of the most stressful aspects of financial hardship. If you are considering or currently going through bankruptcy, you may be wondering how to stop relentless calls, threatening letters, and aggressive collection tactics from creditors. The good news is that bankruptcy provides legal protections that can put an end to creditor harassment.

This blog will cover:

• How bankruptcy protects you from creditor harassment
• The legal actions you can take
• Steps to ensure creditors comply with the law
• What to do if harassment continues despite filing for bankruptcy

Understanding Creditor Harassment and Your Rights

Creditors and debt collectors have the right to contact you regarding unpaid debts. However, the Fair Debt Collection Practices Act (FDCPA) in the U.S. and similar laws in other countries regulate how creditors can approach debt collection.

Some common forms of illegal creditor harassment include:

• Excessive calls at all hours of the day and night
• Using threats, intimidation, or abusive language
• Contacting your family, friends, or employer about your debt
• Sending misleading or false letters to pressure you into paying
• Attempting to collect a debt you do not owe

Once you file for bankruptcy, all creditor harassment must stop immediately due to legal protections provided under the automatic stay.

How Filing for Bankruptcy Stops Creditor Harassment

The Automatic Stay

The moment you file for bankruptcy, whether Chapter 7, Chapter 11, or Chapter 13, an automatic stay goes into effect. This is a court order that stops all collection efforts by creditors.

The automatic stay prevents creditors from:

• Calling you for payments
• Sending collection letters
• Filing lawsuits against you
• Garnishing your wages
• Repossessing your assets
• Foreclosing on your home

Creditors must immediately stop all collection activities once they receive notice of your bankruptcy filing. If they continue contacting you, they are violating federal law and can be penalized.

What to Do If Creditors Continue Harassing You After Filing for Bankruptcy

Despite the automatic stay, some creditors may ignore the law and continue their harassment. If this happens, take the following steps:

Inform the Creditor About Your Bankruptcy

Some creditors may not yet be aware of your bankruptcy filing. If a collector contacts you after you file, provide them with your bankruptcy case number and attorney’s contact information. This should immediately stop further contact.

A simple response could be:

"I have filed for bankruptcy, and an automatic stay is in place. My case number is [XXXX]. Please direct any further communication to my attorney at [attorney's contact information]. Continuing to contact me is a violation of federal law."

Report Violations to the Bankruptcy Court

If a creditor continues to harass you despite being notified of your bankruptcy, report them to the bankruptcy court handling your case. The judge can take action against them, including sanctions, fines, or even dismissing their claims.

File a Lawsuit for Creditor Harassment

If a creditor is knowingly violating the automatic stay, you may have grounds to sue them for emotional distress, financial damages, legal fees, and punitive damages. Your bankruptcy attorney can help you file a lawsuit against the creditor for violating the automatic stay.

Notify Consumer Protection Agencies

If creditors keep harassing you, you can file complaints with:

• The Federal Trade Commission (FTC) in the U.S.
• The Consumer Financial Protection Bureau (CFPB) in the U.S.
• Your state’s Attorney General
• Financial Ombudsman services in the UK, Canada, Australia, and other countries

These agencies investigate illegal debt collection practices and can take action against creditors.

Consider a Cease and Desist Letter

If a creditor refuses to stop contacting you, you can send a cease and desist letter demanding that they stop all communications. Under the FDCPA, once a collector receives this letter, they must stop all further contact except to inform you of legal action.

A sample cease and desist letter could state:

"I am formally requesting that you cease all communication with me regarding this debt. I have filed for bankruptcy, and any further contact is a violation of my rights under federal bankruptcy law. If you do not comply, I will report your actions to the appropriate authorities."

Exceptions: When Creditors Can Still Contact You

While the automatic stay stops most collection activities, there are some exceptions where creditors may still contact you.

• Child support and alimony payments are not stopped by bankruptcy.
• Certain tax debts may still be collected by the IRS or other tax authorities.
• Criminal fines and court-ordered restitution are not dischargeable in bankruptcy.
• Secured creditors, such as mortgage or auto lenders, may still take action to repossess collateral if payments are not made.

How to Prevent Future Creditor Harassment After Bankruptcy

After your bankruptcy case is discharged, creditors should permanently stop contacting you about any debts included in the bankruptcy. Here’s how to ensure they comply.

Keep a Copy of Your Bankruptcy Discharge Order

After your bankruptcy is completed, you will receive a discharge order from the court stating that your debts have been legally eliminated.

If a creditor contacts you after your discharge, provide them with a copy of the discharge order. Inform them that attempting to collect a discharged debt is illegal.

Monitor Your Credit Report

Sometimes, creditors continue to report discharged debts to credit bureaus, which can harm your credit score.

Check your credit report regularly to ensure that all discharged debts are marked as "Included in Bankruptcy" or "Discharged." If a discharged debt is incorrectly listed as active, dispute it with the credit bureau.

Rebuild Your Credit Responsibly

• Obtain a secured credit card to start rebuilding credit.
• Pay bills on time to establish a positive payment history.
• Keep credit utilization low to improve your score.

Final Thoughts

Filing for bankruptcy is meant to provide relief, not add to your stress. The automatic stay is your legal shield against creditor harassment, and you have the right to take legal action if creditors violate it.

If creditors continue harassing you despite bankruptcy protections, take these steps:

• Inform them of your bankruptcy case and provide your attorney’s details.
• Report violations to the bankruptcy court and consumer protection agencies.
• Consider filing a lawsuit against creditors who ignore the law.

By understanding your rights and taking proactive steps, you can end creditor harassment and move forward with financial peace of mind.