What Happens If I file for Bankruptcy but Debt Collectors Keep Calling?

First of all let me explain why creditors are not allowed to contact you while you are in Bankruptcy.  11 USC § 362 of the US Bankruptcy Code states that once a Bankruptcy Case has been filed, no creditors are allowed to attempt to collect a debt or continue debt collection proceedings outside of Bankruptcy Court while the case is pending.  If someone has filed another Bankruptcy case preceding this one there are different rules that apply.  Also, a creditor can file a motion in court seeking permission to get exceptions to this automatic stay.  However, usually creditors don’t file such motions, there are often good defenses to such motions and it takes time for these motions to be heard before a creditor may potentially take action outside of Bankruptcy Court.

Now, after a case has been discharged these protections continue as to the discharged debts.  As you may be aware, certain taxes, student loans, alimony and various other debts are non-dischargeable in a Chapter 7 Bankruptcy.  So the IRS, for instance, can begin collection efforts against you as soon as your case is closed if your tax debt was non-dischargeable.  However, credit card companies and most of your other creditors are forbidden from contacting you.

Section 524(a)(2) of title 11 of the US Bankruptcy Code states, “a discharge in a case under this title operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived”.  This means that no one can even contact you regarding a discharged debt.

In my office if a debt collector violates the Bankruptcy Discharge we bring an action in the Bankruptcy Court seeking sanctions, attorney’s fees and all other possible relief available.  When a debt collector calls a debtor after a Bankruptcy Discharge regarding a discharged debt they are violating the law!

If you are interested in learning more about the protections Bankruptcy can afford you contact my office at 212-244-2882 for a free no obligation consultation.  We only practice Bankruptcy Law and are eager to help.