What to Do When Creditors Call for Payment After Your Bankruptcy Discharge
One of the most important protections you receive when you file for Chapter 7 bankruptcy is the automatic stay — a court order that immediately puts an end to most collection efforts by creditors and collection agencies. The stay goes into effect at the beginning of your case and stays in effect until the end.
When you complete the bankruptcy process and are relieved of most of your debts, the automatic stay is converted into what is known as a discharge injunction. This is a permanent order that is meant to stop creditors from trying to collect on any debt that was discharged in bankruptcy. As a result, you should not be subject to:
- Collection calls
- Collection letters, texts and emails
- Foreclosure threats
- Attempts to put liens on your property
Sometimes, though, debt collectors still call people after the discharge injunction is entered. Occasionally a creditor will make a collection call because they do not know you went through bankruptcy. In that case, you can contact your bankruptcy attorney, who can then call the creditor or send them a letter to stop the collection activity. This usually puts an end to it, at least with honest creditors who really didn’t know your situation.
Other creditors may nevertheless persist in harassing you and trying to get you to pay. This includes so-called “debt buyers,” who may know they are breaking the law but proceed with collection because they presume most people don’t know their rights. This is a bankruptcy discharge violation. You should immediately contact your bankruptcy attorney, who can take these actions:
- Quickly confirm that the debt was indeed discharged
- Formally or informally demand that the creditor cease contacting you
- If needed, ask the court to reopen the bankruptcy case and sanction the creditor for violating the discharge injunction
If the case must be reopened, the creditor usually will be required to pay any attorney’s fees and other expenses you incur. You could also be entitled to compensation for injuries suffered due to the creditor’s violation of your rights.
Whether I handled your bankruptcy case or not, you can reach out to the Law Offices of Michael Jay Berger if you are still being harassed by creditors after you received a discharge. Contact my Beverly Hills office at 310-271-6223 or contact us online to schedule a free lawyer consultation.