One of the most important aspects of bankruptcy law is the “automatic stay” that’s created the moment a case is filed.
Automatic Stay
This “stay” means that all efforts by a creditor to collect a debt or to enforce rights against a debtor’s property have to stop immediately.
So these must end
- foreclosures
- garnishments
- tax offsets
- license revocations
- arbitration
- evictions
- any other proceeding to collect
Sometimes a secured creditor is able to later get “relief” from the stay but unsecured creditors almost never do.
The result is that filing bankruptcy will immediately end a creditor’s right to garnish wages or bank accounts.
Debt Collection Bu Creditors Must Stop
This “stay” prohibits creditors from continuing debt collection efforts.
Any violation of the stay can result in actual and punitive damages being awarded to the debtor, plus attorney’s fees.
Sometimes there are disputes over whether a creditor received notice of the bankruptcy filing so it’s important for debtors to provide the most recent address for a creditor or debt collector.
It’s also better to list the customer service address rather than the address to which payments should be sent.
Listing both the creditor and any collection agency to which the debt has been assigned or sold is also a good idea to make sure notice is provided to everyone possible.
At Nancy L. Thompson Law Office P.C. we’ve been able to obtain many damage awards for clients who file bankruptcy and then continue to face debt collection from creditors in violation of the automatic stay.
