Bankruptcy May Stop Collections
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Filing Bankruptcy May Provide Creditor Protection

Bankruptcy was designed to stop collection calls and letter, foreclosure and repossession. Your creditors may not like it, but bankruptcy may give you a fresh start.

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In addition to the broad shelter and protection it offers, federal and state bankruptcy laws can provide a particularly powerful ally for anyone in need of protection from creditors and collection agencies.

Protection from Creditors

If you are late on a bill - even if you are only one month late - your creditors could take action against you. A creditor is generally any person or group you owe money to, and typical collection actions include telephone calls and letters.

A creditor may make collection actions themselves, but many turn to debt collection agencies.

Debt collectors have a bad reputation, and they've earned it. Each state has its own laws covering collection agency conduct.

In most states, creditors are not allowed to:

  • Call outside the hours of 8 a.m. - 9 p.m.
  • Threaten illegal actions, such as physical violence or property damage
  • Use profanity

However, creditors and collection agencies are notorious for ignoring these laws, pushing the boundaries or working in the gray area of the law. For example, consumer groups have reported collection agencies have taken actions like threatening deportation for Hispanic debtors, including legal citizens, even if they have no power or authority to do so. Creditors may place embarrassing phone calls at work, or call several times a day.

Often, people are intimidated into taking action, even if those actions aren't the best choices.

When you're facing overwhelming debt, threats and harassment only add to the stress. Sometimes, instead of helping you find a solution these phone calls can make things worse. Intense stress can have a negative effect on your health, and make it more difficult for you to get your finances back under control.

If you’re suffering under debt, know that you have options. Chapter 7 and Chapter 13 could help you get out of debt. Speak with a local bankruptcy about whether Chapter or Chapter 13 can help you.

Bankruptcy Protections can Stop Collection Actions

The moment you file bankruptcy, the court-ordered "Automatic Stay" kicks in. The Automatic Stay is a powerful court order that is sent to all of your creditors and informs them you are now under the protection of bankruptcy. While under this protection, creditors may not take any collection actions against you.

Collection actions that may be stopped under the automatic stay include:

  • Lawsuits
  • Home foreclosure
  • Repossession
  • Phone calls
  • Letters

Once you file bankruptcy, all of your debts and creditor claims will be dealt with by the laws and the bankruptcy courts. Creditors may no longer go straight to you. Rather, they must go through the proper channels.

Once your debts are dealt with during bankruptcy, they will be, in effect, closed.

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For example, in a Chapter 7 bankruptcy your credit card debt can be instantly erased.

In this instance, your debt has been handled and creditors may not continue to try to collect. If they do, they could face legal action.

The same applied to other debts handled. Bankruptcy doesn't just put a temporary halt to harsh creditor actions, but provides a long-term solution that allows you to be free from their pressure.

File for Bankruptcy Protection Today

To get this profound protection against creditors, you must first file bankruptcy.

If you have determined that bankruptcy is the right option for you, start the bankruptcy process by speaking with a local bankruptcy attorney today. A bankruptcy lawyer can explain, in-depth, how the process could affect you and answer any questions you might have.

To contact a bankruptcy lawyer near you who can evaluate your case, simply complete our free bankruptcy evaluation form on below or call toll free, 24-hours a day: 877-349-1309.

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