Continued Collection after Bankruptcy Filed
Once a bankruptcy is filed and all the Creditors are notified all the collection calls should stop. If a Creditor continues to call or send collection letters to a Debtor who is in a bankruptcy, they are in violation of Federal Bankruptcy Laws.
I have a Debtor who filed bankruptcy and listed a Creditor on the paperwork. However, the Creditor turned the file over to an attorney to file a civil lawsuit. The lawsuit was filed after the bankruptcy, therefore; is a direct violation of the automatic stay that is put in place when a Debtor files bankruptcy. Before an adversary can be filed, the Debtor must send a cease and desist letter to the Creditor to make sure they are aware of the fact the Debtor is in an active bankruptcy. If after the cease and desist the Creditor continues to attempt to collect the debt an adversary can be filed in the bankruptcy.
An adversary is a proceeding in bankruptcy court. It can be filed for a number of different reasons and by either a Creditor or a Debtor. If a Creditor continues to collect a debt after the bankruptcy is filed, the Debtor would file an adversary to get the collection to stop. In certain instances, the Debtor might be entitled to punitive damages, but only if the collection effort is egregious. The Debtor might also be entitled to attorney’s fees for having to file the adversary.
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