Tips For Handling Creditors in Bankruptcy

Introduction

When consumers file bankruptcy creditors must follow a number of federal laws designed to prevent illegal practices. Federal bankruptcy laws protect consumers who file with the court. During bankruptcy, consumers obtain an automatic stay against all debt collection, wage garnishments and law suits. Unless the judge lifts the stay, creditors cannot contact consumers while they are in bankruptcy. Although the majority of creditors follow the rules, some may disregard the laws and continue harassing those in debt. For consumers facing debt relief, knowing how to handle unscrupulous collectors is important. All consumers have rights and should protect those rights at all costs.

Step 1

Consumers must list all debts when they file bankruptcy. The bankruptcy court sends out notices to every creditor on the list. If a debt is not listed, the creditor can still pursue its collection actions. However, creditors listed on the filing must cease all attempts to collect debts. Any creditor that disregards the notice and continues to call, send letters or harass consumers while in bankruptcy should be reported to the court. The bankruptcy court may fine creditors who do not follow the laws.

Step 2

Consumers should obtain the names, customer service identifications and phone numbers of creditors who contact them while they are in bankruptcy. Using caller ID may help, but keep in mind that some creditors can mask their telephone numbers as unknown. Some creditors will hang up if someone other than the person in debt answers the call. Keep any and all collection letters that arrive by mail or some other source. Also, be aware that some creditors may file lawsuits in attempts to collect on debts. Be sure to put all bankruptcy filings in a secure location. Consumers can present their paperwork in court as protection against wage garnishments or law suits.

Step 3

Never ignore a creditor's threat to sue, even while in bankruptcy. Consumers should inform creditors that they have filed bankruptcy. If asked, give the date of filing and type of filing to creditors. If any creditor continues to call after giving this information, contact the bankruptcy court and report the company.

Some More Tips

• Do not agree to pay creditors while in bankruptcy. If a bankruptcy attorney is handling the case, refer all creditors who call to this person.
• Never argue or threaten creditors. Simply hang up the phone. Some creditors may use harassment or bad language to upset those in debt.
• Do not throw away any collection papers that creditors send. The letters may used as proof when reporting debt harassment while in bankruptcy.
• When completing bankruptcy forms, be sure to add every creditor, their contact information and the amount of debt. Make copies of the forms before sending them to the court.
• Report any creditors who attempt to collect debts after a bankruptcy discharges. This may happen as well in an attempt to trick consumers into paying discharged debts.

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