Since the US real estate meltdown that started in 2007, the numbers of those filing bankruptcy continue to rise. It was recently reported by the administrative office of the US Court, that bankruptcies in 2010 totaled 1,596,355, which was up 13.8% over 2009 bankruptcy filings of 1,402,816. Back in 2007, the bankruptcy filing rate was only 801,269 when the financial crisis began and has continued an upward climb with 1,042,993 in 2008, and continued onward to the unbelievable filing rates we are seeing today. With large amounts of people having financial trouble and filing bankruptcy, creditors continue to get more and more aggressive with their collection tactics. Many bankruptcy attorneys have reported collection attempts after the debt was discharged by bankruptcy.
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What happens to a creditor if they continue to try and contact the debtor after the bankruptcy filing? Under the current bankruptcy code, when a bankruptcy is filed the automatic stay is put in place and a creditor is not allowed to make contact or any collection attempts against the debtor. If the debtor has not gotten their discharge, the creditor is in violation of the automatic stay and could be sanctioned for their actions. If the bankruptcy has been discharged, the creditor is violating a discharge injunction and could get in trouble for this as well.
Most of the time when a creditor contacts the debtor after a bankruptcy filing it is an error on their part and when they realize it they stop. When a debtor is contacted by the creditor after filing they should immediately contact their bankruptcy lawyer that represented them, so that attorney can notify the creditor of their violation and ask them to stop. For making a simple mistake, the court will frown on a debtor trying to take an action against a creditor. Sometimes, when debts are sold to debt collection companies, the company that bought the debt many times will act more aggressive and in a reckless manner continuing to beat up on the debtor even though the debt was discharged.
When creditors have been warned of a violation and they continue to be more aggressive, taking legal action is warranted. A debtor can file a lawsuit or get sanctions filed against the creditor in order to stop any further collection attempts and punish them for their egregious behavior. When a creditor continues to harass a debtor, after filing bankruptcy, it is important to keep a written record of all the phone calls and what was said. This will be beneficial to build a case against the creditor.
Should a lawsuit be necessary, the bankruptcy lawyer can ask for legal fees from the creditor depending on the circumstances of the case. Depending on how strong the case is based on the violations of the creditor, the bankruptcy lawyer should be able to recover damages and attorney fees from the creditor.
If you or anyone you know is being contacted by creditors that are continuing to attempt to collect on debts that were discharged in bankruptcy, the debtors bankruptcy lawyer should be contacted immediately to see if the violations warrant further legal action.
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