While the decision to file for bankruptcy can sometimes be difficult to make, it can ultimately bring about a much needed fresh financial start and, more importantly, peace of mind. It does this by bringing a halt to all communication from debt collection agencies, meaning all correspondence -- calls, letters, etc. -- cannot be directed to the person filing for bankruptcy.

How exactly does this work?

If you decide to file for either Chapter 7 bankruptcy or Chapter 13 bankruptcy, an automatic stay will immediately go into effect.

Simply put, an automatic stay prevents most creditors from doing anything to collect or enforce a claim against a debtor. It essentially stops the following actions: auto repossession, foreclosure, wage garnishment, and debt collection actions.

Not surprisingly, some debt collectors either fail to take the necessary steps to update their files to show that a debtor has filed for bankruptcy or simply ignore it altogether, willfully continuing to harass a debtor.

In these latter situations, a creditor's persistent violation of the automatic stay can really cause serious problems for the debtor. In fact, the presiding bankruptcy court judge may even award damages and attorney's fees upon proof of the violation.

This was recently the case in the state of Florida, where a bankruptcy judge ordered Bank of America to pay $12,500 in attorney fees and additional damages for emotional distress for violating the automatic stay of one debtor.

Here, evidence was presented that Bank of America called the debtor 38 times after he filed for bankruptcy protection to inquire about his missing payments.

Conduct such as this is unacceptable. Any debtor who believes that a creditor is violating the automatic stay should contact his or her lawyer immediately.

Stay tuned for more from our San Antonio bankruptcy blog ...

Regardless of your financial situation, contact an experienced legal professional to learn more about your rights and your options under Chapter 7 bankruptcy or Chapter 13 bankruptcy.

This post is for informational purposes only and is not to be construed as legal advice.


The Huffington Post, "BofA allegedly called debtor 38 times after he filed for bankruptcy" March 30, 2012