Can Creditors Still Contact You or Bill You in a Chapter 7 Bankruptcy?
Deciding to file bankruptcy is a difficult task. Receiving collection calls at home and at work, though, makes the decision necessary for debtors who find the constant calls intolerable. When the debtor files for bankruptcy protection under Chapter 7, several things happen, including court-imposed protection from creditors.
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Creditor Contact After Hiring an Attorney
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Generally, a debtor who hires an attorney directs his creditors to the attorney's office. Most attorneys take responsibility for handling the client's interaction with creditors or their representatives. The debtor's attorney instructs her client to make it known to the creditor that he has filed bankruptcy, providing the collector with the attorney's name and telephone number for any future contact.
Creditor Contact After Filing Chapter 7
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Filing the Chapter 7 bankruptcy petition automatically stops most collection action. The bankruptcy trustee notifies all creditors listed on the petition, which effectively serves notice that they may not call, correspond or otherwise contact the debtor. The stay stops lawsuits, garnishments, repossessions and foreclosure action in most situations. If a creditor or collection agency calls, the debtor should supply the representative with his bankruptcy case number. If the contact continues, the client should supply his attorney with details of the illegal communication.
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Creditor Contact After Discharge of Debts
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When the debtor receives a discharge in Chapter 7 bankruptcy, she is released from personal liability for the debts the court discharges. The discharge of debts permanently prohibits creditors from taking collection action of any type. This prohibition includes the filing of lawsuits, initiation of garnishment proceedings and any form of contact with the debtor. Discharge does not normally apply to secured debt, such as a loan on a vehicle, unless the debt was made unenforceable in the bankruptcy case. If the lien remains in effect, the lien holder may repossess or recover the secured property.
Actions Not Protected by Bankruptcy Filing
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The bankruptcy court's automatic stay does not apply to criminal proceedings against the debtor; collection of a court-imposed support obligation that does not involve property included in the bankruptcy estate; and civil court actions pertaining to establishment of paternity, establishment or modification of a support order, child custody or visitation, marriage dissolution except where division of bankruptcy estate property is involved and any civil action involving a domestic violence situation. The filer's attorney may answer queries about other, less common exceptions from court-imposed stays.
Considerations
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A bankruptcy filing stays on the debtor's credit record for 10 years. A debtor may not file Chapter 7 bankruptcy for eight years after discharge of debts in the debtor's current bankruptcy filing. Federal bankruptcy laws require completion of two classes: a credit-counseling course which is required before filing for bankruptcy and a debtor education course which is required before discharge of debts. Contact a legal professional for assistance in filing a Chapter 7 bankruptcy petition.
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