Friday, April 8, 2011

I Filed Bankruptcy, but the Collection Agency Keeps Calling!

I Filed Bankruptcy But the Collection Agency Keeps Calling!

When you file for Chapter 7 or Chapter 13 bankruptcy, an automatic stay goes into effect protecting you from collection activity or legal action from any of your creditors. Most creditors respect the automatic stay and step back to let the bankruptcy court work its magic. Collection agencies, however, often overlook your rights and will continue calling you and sending you collection letters even after you file for bankruptcy.

Note: For those who have filed a previous bankruptcy case in the past year that was dismissed by the court, the automatic stay is limited and sometimes nonexistent, depending on how many times you filed previously in the last 12 months. 

Violating the automatic stay in bankruptcy is illegal and if anybody knows illegal – its the debt collectors. They're all about illegal activity.

Does the Collection Agency Know you Filed Bankruptcy?

In some cases, collection agencies continue calling because they simply aren't aware that you filed bankruptcy. Your attorney notifies your creditors, but sometimes attorneys send notices to the original creditor rather than the collection agency that bought your debt. The original creditor isn't under any obligation to inform the debt collector that an automatic stay is in place and it can no longer call you or send you letters. Thus, the illegal communication efforts continue.

Inform Debt Collectors About Your Pending Bankruptcy 

If a collection agency is violating the automatic stay, stopping the behavior is usually as simple as answering the telephone when the collection agency calls, informing the debt collector on the other end that you've filed for bankruptcy and giving the debt collector your bankruptcy case number.

Unfortunately, as we've discussed so many times before, debt collectors have high turnover and, because of this, receive little training so as to ensure that they work as many days as possible before the company must hire yet another bill collector to take the old one's place when he burns out. If the debt collector isn't aware of the seriousness of the automatic stay, he may simply hang up the phone and move on to the next call – leaving your number in the automated dialer.

Be patient. Spend an entire day if you must just answering the telephone and calmly giving each bill collector your bankruptcy case number. It's unlikely you'll have to dole out this information more than once or twice before the company gets the message and the collection calls stop.

Notify Collection Agency of the Automatic Stay in Writing

If your efforts to notify debt collectors of your pending bankruptcy case over the phone prove futile, put the notification in writing. Send a letter to the collection agency via certified mail, return receipt requested, informing it that you have a bankruptcy case pending and contacting you or otherwise pursuing collection activity during this time is a violation of the automatic stay and ILLEGAL. Once again, include your bankruptcy case number so that the company can verify your claims if it wishes. If you have an attorney who doesn't charge extra for this service (he shouldn't, since it was his responsibility to notify creditors of your bankruptcy in the first place) ask him to draft the letter for you. Collection agencies almost always take letters from attorneys more seriously than those of consumers – even if the letter's content is the same.

Put it in writing

Suing Collectors That Violate Bankruptcy's Automatic Stay

If a collector willfully and purposefully violates the automatic stay after being notified of your pending bankruptcy case, you have the right to file lawsuit against the collection agency and seek damages and legal fees.

Remember, the automatic stay is supposed to give you a breath of relief from collection efforts while you restructure your financial life. If you filed bankruptcy yet a collection agency keeps calling, its violating your federal rights and can be held accountable for those actions in court. 

1 comment:

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