How To Deal With Creditors

creditor-callOne of the most common events that pushes a person or couple to take the step of commencing a bankruptcy action is dealing with the harassing telephone calls of creditors and debt collection agencies. Although there are legal limits on what these individuals and companies can do to attempt to collect a debt, this does not make dealing with the harassment much easier on the people struggling to find a way to pay the debt. One of the greatest benefits of filing a bankruptcy action is the automatic stay that starts immediately upon filing, preventing creditors from continuing to contact debtors outside of the bankruptcy court.

Managing Creditors before Filing

Although the goal is to get the bankruptcy action filed in order to put a complete halt to the contact, there are things that can be done to manage the interactions prior to the filing. Once the decision has been made to file a bankruptcy case, it is important to find an experienced attorney as soon as possible. The retention of legal counsel means that you can refer creditors to the attorney when they contact you, avoiding having to deal with the harassment until the case can be filed. It is important to refrain from incurring any more unnecessary debt during the time period between deciding to file bankruptcy and actually completing the requirements for filing or it may provide ammunition for a creditor to challenge the good faith basis of the filing through an adversary proceeding.

The Federal Fair Debt Collection Practices Act (FDCPA)

It is important for every consumer to realize that there are restrictions in place that limit what a creditor may do in an attempt to collect a debt. If the creditors violated the provisions of the FDCPA before the bankruptcy case was filed, it may be possible to recover damages for the violations. Some of the prohibitions that apply to creditors include:

  • Repeatedly contacting the debtor after a creditor has been informed that the individual has retained an attorney to handle this matter;
  • Calling a person at work after the creditor has been asked not to do so;
  • Informing a person’s employer or co-workers about the existence of the debt;
  • Threatening that a person is subject to arrest and prosecution for failing to pay a debt;
  • Impersonating an attorney;
  • Calling a debtor at his or her home after 9:00 PM or before 8:00 AM; or
  • Discussing the debt with anyone other than the debtor or his/her spouse.

These are only a few of the restrictions that exist. It is important to take note of any contact from creditors in order to discuss the actions with an attorney in order to determine if there were legally actionable violations.

Dealing with Creditors after the Filing of the Bankruptcy Action

Once the bankruptcy action has been filed, creditors are absolutely barred from contacting a debtor. The creditor is notified about the filing through a 341 Notice, which the court mails to all the creditors identified in the initial filing – this is why it is important to be careful and thorough in the preparation of the filing paperwork. If a creditors contacts a person after the filing of the case, the filer should inform the creditor of the bankruptcy action and provide the case number. Any mailing from a creditor, including additional bills, should be addressed with a return mailing containing the initial correspondence and a copy of the 341 Notice. If there is ongoing contact, it is important to record all identifying information and then seek the assistance of the attorney handling the bankruptcy case. There may be legal ramifications for the creditors who are violating the stay.

Charlton & Glover Advocates for Those Going Through Bankruptcy

A bankruptcy action is stressful enough without the anxiety being compounded by aggressive creditors. If you live in the Roswell or Alpharetta area, the experienced bankruptcy attorneys at Charlton & Glover can help you get relief from your creditors and pursue a successful bankruptcy action. Call us at (770) 993-1005 to schedule a free initial consultation.

Posted in Bankruptcy.