How A Bankruptcy Filing and Automatic Stay Can Alleviate Creditor Harassment

Ask a person who has filed for bankruptcy what finally pushed them to take the plunge, and they’re likely to tell you that it wasn’t the bills and it wasn’t the rapidly-falling credit rating: it was the creditor harassment. There is only so much that any one person can take of dunning bills arriving in the mail and aggressive debt collectors calling at all hours and threatening. Though the Fair Debt Collection Practices Act (FDCPA) explicitly says that debt collectors are not permitted to “harass, oppress or abuse” debtors, in real life they continue to call and annoy people, knowing full well that most people are unaware of their rights, or are too intimidated to take action against them.

Though there are steps that can be taken through the FDCPA, the most effective way to alleviate creditor harassment and put yourself back on the road to financial stability is through a bankruptcy filing. This is because when a person files for bankruptcy, it results in something called an automatic stay that explicitly stops creditors from taking any type of action to “collect, assess or recover” any claim that they previously had against the debtor. Included in the bankruptcy filing is a list of all of the debtor’s creditors and their debt to them, and all of the creditors receive a notice telling them that they must stop trying to collect on the debt or face serious consequences.

What Happens if Creditor Harassment Continues?

If despite an automatic stay having been put in place, a creditor continues to call or send collection notices, then you actually have the right to file a claim against them seeking damages, including attorneys’ fees and costs. In some cases, a debtor may be able to sue the person or organization to whom they owe money if they can prove that they knew that the bankruptcy petition had been filed. That claim can include both compensation for emotional distress and punitive damages, depending upon the specifics of the situation and the seriousness of the threat or upset that the creditor faced, and there have even been cases where debtors have been successful in pursuing claims against creditors who simply berated then for having filed for bankruptcy.

You can make creditor harassment a thing of the past by filing for bankruptcy. For more information, contact us to set up an appointment to discuss the specifics of your situation.