One of the more frequent reasons debtors give for filing bankruptcy is to obtain relief from the constant contacts from creditors and collection agencies that are attempting to collect on the debts. Bankruptcy is designed to provide consumers with such relief. Once a petition is filed with Court, the Court issues what is known as an “automatic stay”. This means that all creditors and collection agencies are required to immediately cease all collection activity. This applies to all lawsuits as well. It may take the Court a week or longer to mail notices of the bankruptcy filed to the creditors you listed in the petition, but if they call you in the meantime, you can give them the case number so they can verify the filing. This will put them on notice of the filing. (Please note that if you have had two or more prior filings dismissed within the past twelve months, no automatic stay will be issued immediately. Your counsel will need to file a motion to have it put in place.)
Once your case has been completed, the Court will issue and serve on all creditors an order of discharge. You will receive this after either a Chapter 7 or Chapter 13 bankruptcy filing, provided you completed your payments under the Chapter 13. This order has the same effect as the automatic stay. All creditors whose debts were discharged are now barred from taking any action, or even contacting you, at any time in the future. (This of course would not apply to any debts that are not discharged, such as student loans and certain taxes. These creditors will again be able to contact you once the discharge order is issued.)
Should any creditor (or its collection agency) contact you while the automatic stay or the discharge order is in effect, such is a violation of federal bankruptcy law. This violation can lead to monetary fines being issued against the creditor and/or its collection agency, that they would have to pay to you. However to prove this to the Court, detailed information must be presented. Thus, from the time the petition is filed, you will need to keep detailed records of all contacts received, such as date and time of phone calls, name of person calling you, any phone number given, and statements made.
The above provisions of bankruptcy law go not go into effect until the petition is filed. However you do have some protections under the Federal Debt Collections Practices Act (FDCPA), which applies to collection agencies (but not the original creditors). For instance, once you have retained an attorney, and you inform the collection agency of this, they are barred from contacting you further. If you have been receiving contacts from a collection agency that you think might be abusive, you should review these with an attorney to see if any contacts violated the FDCPA. Again, you will need to keep detailed records of these contacts, to be able to prove them in Court, if there is a violation. (State law does apply to original creditors, but the law is less clear as to what constitutes a violation.)
