People file for bankruptcy for relief from financial stress. They want to prevent a successful creditor lawsuit or end frustrating phone calls. Most people can achieve those goals with a timely bankruptcy. Those who take action before a creditor secures a judgment can prevent wage garnishment or liens placed against their property. They can also stop abusive collection calls.
At the end of the bankruptcy process, the courts may discharge the remaining balance on eligible debts. Many people use bankruptcy to address overwhelming credit card debt, medical debts and other unsecured financial obligations. Receiving a discharge is often a profound relief for those who have struggled financially. Unfortunately, some filers face resumed attempts to collect on certain debts after bankruptcy.
How can people end creditor harassment after they have already filed a successful bankruptcy case?
Notify creditors of the bankruptcy
Most financial institutions and debt collection businesses have services that automatically notify them of bankruptcy cases involving their borrowers or debtors. However, those systems are not perfect.
Sometimes, an organization might fail to properly input information about a particular debt or debtor, resulting in resumed attempts to collect on a debt discharged in a bankruptcy filing. In such cases, the debtor typically needs to notify the collection professional who contacts them of the recent bankruptcy discharge.
The lender or collection company can then verify the bankruptcy case and update internal records to prevent further inappropriate collection attempts. Any debt included in the bankruptcy discharge is no longer legally subject to collection activity.
Know when to take legal action
Creditors cannot resume making collection phone calls or otherwise try to collect on the debt after the courts have granted the filer a discharge. Most collection companies and lenders are eager to comply with bankruptcy laws, as violations can be quite expensive. That being said, some companies may continue trying to demand payment.
In such cases, it may be necessary to take legal action against the company because of abusive debt collection practices. Keeping records of every attempt to collect on the debt and every time the filer provides information about their prior bankruptcy case can help them prove that a creditor or collection company has violated fair debt collection practices. In the vast majority of cases, simply verbally confirming over the phone that a bankruptcy occurred is enough to end collection efforts.
Those dealing with abusive collection attempts while trying to rebuild their lives after a bankruptcy filing may need help addressing creditor misconduct. People familiar with the rules that govern collection activity and bankruptcy can use that information to assert themselves when facing inappropriate collection efforts.
