When Debt Collectors Ignore Your Bankruptcy

If you made mistakes as a teenager that could potentially hurt your career as an adult, learn from my family's experience on how to help with that situation.

When Debt Collectors Ignore Your Bankruptcy

27 June 2019
 Categories: Law, Blog

One of the most awesome effects a chapter 7 bankruptcy filing brings consumers is the immediate disruption of debt collection activities. This means no more letters, phone calls, threats, lawsuits, and more. Unfortunately, some debt collectors may not comply. Read on for some reasons why you are still being contacted about debts and how to handle the situation.

The Automatic Stay

After you file, the automatic stay goes into effect. A stay, in legal terms, means "stop" and this order is directed at your creditors. If they continue to contact you after you've filed, give them a few days to get the notice and then contact your bankruptcy lawyer. Some creditors are slow to stop contacting you for various reasons. Never ignore notices from creditors – give them to your lawyer and have them take legal action.

The Discharge Injunction

After you've attended the creditor's meeting and fulfilled your educational requirements, you can expect to receive your final discharge. This discharge prompts a second notice to creditors informing them of the discharge of the debt. This order is meant to serve as official notice that they can no longer try to collect the debt in question.

Examine Your Discharge for the Following

There are some circumstances where creditors may contact you after a filing and after the discharge. Take a look at your bankruptcy paperwork and examine it for the following situations:

1. Reaffirmations – This means that you agreed to continue paying the debt after the filing and discharge. Often associated with an auto loan, a reaffirmation can allow filers to hang on to the property as long as they promise to continue making payments. If you fall behind on reaffirmed debts, collection actions are unaffected by a bankruptcy filing.

2. Timing of the Debt – Some people take advantage of the time period right after a filing to seek more debt before the bankruptcy appears on their credit report. Any new debts you entered into after you filed and that were not listed on the matrix are not discharged and are subject to collection attempts.

3. Debts That Cannot be Discharged – Some debts are bound to linger after a bankruptcy. If you have any of the following forms of debt, don't expect discharge or coverage by the automatic stay:

  • Student loans.
  • Some federal and state tax debts.
  • Back child support and spousal support.
  • Legal debts and fees.
  • Victim restitution.
  • Debts that were fraudulently obtained.
  • Debts you did not list on your matrix.

Speak to Your Bankruptcy Attorney

Your bankruptcy law firm should be consulted when an unexpected debt situation arises after a filing. They will review your documents and advise you on taking action against the creditor, if pertinent. Often, a quick phone call from the lawyer to the creditor accomplishes a great deal. Violators can face sanctions from the court if they fail to comply.

About Me
teenage mistakes that could ruin adult careers

My son has had the goal of becoming an attorney since he was about 14 years old. Unfortunately, he made a very poor decision with a group of friends when he was 16 that put his future plans in jeopardy. When my son told me what had happened and we received the citation, I knew that we had to hire an attorney to help him through this. I could not see how a small incident such as this should hurt his chances for success when he is an adult. Thankfully, things worked out for us, but it was a long journey which you can follow on our blog.