We know that under the automatic stay, once you file bankruptcy, creditors are supposed to leave you alone. But what happens if they don’t? The Jones Law Firm is here to explain your credit law rights.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act is the federal law that protects consumers from debt collector harassment and abuse. Though the act covers the relationship between debtors and creditors, the scope of which the Act and automatic stay are different.
Because the Act works to curb abusive, deceptive, and unfair debt collection practices by collectors and the automatic stay halts all communication, these legal actions are not inherently the same, nor do they protect the same people. However, in some cases, they can be used to make a case in court when the terms of bankruptcy or debt collection have not been followed through.
Because of the fragility of the scopes, there are often better ways to protect yourself from creditors.
When Creditors Violate the Automatic Stay
Because the automatic stay is a court order, collectors violating that by harassing you may be found guilty of contempt, damages, sanctions, or a combination. Such examples of violations include:
- A creditor repossesses a vehicle or continues with the foreclosure process on your home. Though the action will be deemed invalid, the creditor will face legal consequences.
- Continuation of collection letters, phone calls, etc. can result in fines, damages, and legal fees if it continues.
However, it is important to know that creditors can request the automatic stay be lifted shortly after they receive the notice so they can continue a lawsuit, proceed against your personal property, or preserve the value of an asset in which they have a vested interest.
If the court does not grant their request, they cannot continue to seek collections from you. Reasons the court may allow the collections to continue include:
- For Cause (meaning bad faith or a lack of adequate protection of the property being used as collateral causes the stay to be lifted)
- Lack of Equity
- Stay Is Not Necessary for Reorganization of Debts
Creditors are still calling. What should I do?
If you have filed for bankruptcy and the automatic stay has been issued, you may be able to pursue legal action against your creditors. You need to contact a bankruptcy attorney who can navigate the specifics of your situation and ensure that the collectors do not fall under one of the approved categories for collection.
If they are harassing you in violation of the automatic stay, we can help protect you from further wage garnishment, collection calls, and unnecessary payments.
Contact Us for a Free Consultation About How The Jones Law Firm Can Help You
With offices in Reynoldsburg, Ohio, The Jones Law Firm works with clients in and around Columbus and throughout central Ohio. Contact The Jones Law Firm today to speak about your specific situation and how we can help you.