Filing bankruptcy puts an immediate stop to most collection activity. Here's how the automatic stay works — and what to do if collectors keep calling.
Filing bankruptcy stops collection agency and creditor harassment — by law.
Creditors may not find out about the filing right away. But once a creditor is informed of the bankruptcy and given the basic case information — the chapter filed, date filed, and case number — they must take no further collection action. The only exception would be if they obtain bankruptcy court authority to proceed, which is extremely rare.
This protection comes from 11 U.S.C. Section 362(a) — the federal "automatic stay" provision.
Creditors holding debts that cannot be discharged in bankruptcy — like taxing entities, student loan lenders, and ex-spouses owed child support or alimony — must still cease collection efforts against the bankruptcy estate at least until the date of discharge.
In most Chapter 7 cases, that discharge comes roughly 4 months after filing.
If a creditor or collection agency calls after you've filed, be ready to give them this information:
Confirm who you are.
The date your petition was filed.
From your court paperwork.
Chapter 7 or Chapter 13.
The bankruptcy district where you filed.
If the creditor persists after being told about the bankruptcy, that persistence may constitute an actionable violation of the automatic stay. Consult a licensed attorney about your legal options.
Many people who are behind on their bills dread phone calls from collectors. Bill collectors can be intimidating — but no consumer should live in fear. If you follow these rules, you can answer your phone with more confidence even before you file.
Lies come back to haunt you. Don't tell a collector "the check's in the mail" if it isn't. Your lie or false promise will likely be repeated back to you in a later call.
The collector is taking notes — you should too. Keep track of what you said and what they said. Write down the collector's name, the company, and the date and time of the call. This helps if you speak with them again.
If you're experiencing a temporary financial setback, explain the situation. The collector may give you time to recover. Just remember Rule #1 — always tell the truth.
Saying plainly "I cannot pay right now" takes much of the power away from an aggressive collector. It ends the negotiation script they're following.
If you cannot pay your bills, talk to someone who can help. Call us for a free evaluation — or consult a licensed attorney for legal advice about your specific situation.
Even before you file bankruptcy, the Fair Debt Collection Practices Act (FDCPA) protects you from abusive collection practices.
Under the FDCPA, collectors cannot:
If a collector violates the FDCPA, you may be entitled to damages. Consult a licensed attorney to evaluate your situation.
Call us for a free evaluation. We'll explain your options — no pressure.