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FAQ'S

Thursday, September 15th, 2005

by Theodore Sliwinski, Esq.

Covered in this Article:

• How can a person stop his creditors from harassing him?
• How long after the bankruptcy filing will my creditors stop calling me?
• Can a bankruptcy filing stop a debtor from being sued or from receiving harassing phone calls?
• Will filing a bankruptcy stop a wage garnishment?
• Does filing for bankruptcy stop lawsuits?
• Does the automatic stay protect the debtor’s bank accounts?

1. How can a person stop his creditors from harassing him?

Federal law greatly protects that harassed debtor; The Fair Debt Collection Practice bars creditors from harassing debtors. The Fair Debt Collection Practices Act (“FDCPA”) provides gives a person specific legal rights to sue creditors who continually threaten or harass you, call you at off-hours, or make false representations to you including saying that they are going to attach your wages, sue or bring any kind of legal action when they are not.

After a lawyer is retained, no creditor may contact you without your permission after they are advised that a lawyer represents you. You must first say that a lawyer (whoever it is) is representing you and that they should contact him/her. Give them the lawyer’s telephone number. If the creditor contacts you by any means (phone, letter, personal contact) again, notify your lawyer at once. You may have a right of action.

Also, each contact that a creditor makes must contain words to the effect that:

I am _________. I am a debt collector representing ____________(creditor). Information obtained during the course of this call will be used for the purpose of collecting the debt. If the creditor has not been advising you as above, you may have a right to sue.

Moreover, when you come to my office, bring your letters attempting to collect from you. They too must contain warnings such as:

This is an attempt to collect a debt. Any information obtained will be used for that purpose. Unless within 30 days of your receipt of this notice, you notify us that you dispute the validity of this debt, it will be assumed to be correct. If you notify this office within thirty days that you dispute the validity of the debt, we will obtain verification of the debt or a copy of the judgment. If you request it within 30 days, we will provide you with the name and address of the original creditor (if different from the current creditor).

If the letter does not state the above, or words similar or close to the above, the you may also have a right of action. Any lawsuits filed under FDCPA allow for counsel fees, damages, and costs. You should be diligent in protecting your rights. The statute of limitations for bring such actions is only one year, so don’t wait to bring up the situation to the lawyer.

2. How long after the bankruptcy filing will my creditors stop calling me?

Immediately! Once a creditor or bill collector becomes aware that you are filing then it it must immediately stop any and all collection efforts. After you file your bankruptcy case the court mails a notice to all the creditors listed in your bankruptcy schedules. This process usually takes a couple of weeks. Your creditors will also stop calling if you inform them that you have filed, if  you supply them with your case number. In some cases, you or your attorney should contact the creditor immediately upon filing the bankruptcy case, especially if a lawsuit is pending. If a creditor still continues to use collection tactics once they are informed of the bankruptcy, then they may be liable for court sanctions and attorney fees.

3. Can a bankruptcy filing stop a debtor from being sued or from receiving harassing phone calls?

Once a bankruptcy is filed all of your creditors are stopped from trying to collect their debts. Therefore, all collection calls must stop, lawsuits must be dismissed, collection letters can’t be sent anymore, and the repo man must be called in.

4. Will filing a bankruptcy stop a wage garnishment?

Absolutely, yes it will. Many debtors file bankruptcy immediately to stop wage garnishments. All wage orders, garnishments, etc., except for child support are vacated by the automatic stay provisions under section 362 of the Bankruptcy Code, (11 U.S.C. 362). Remember, a garnishment from Family Court Probation is not stopped by bankruptcy. Even though you have filed your kids must still eat!

5. Does filing for bankruptcy stop any lawsuits?

Filing for a  chapter 7 case automatically stays or stops most lawsuits. A few days after a chapter 7 case is filed, the court will mail a notice to all creditors ordering them to refrain from any further action against the debtor. If the debtor can’t wait this long, it is permissible for him to notify one or more of the creditors of the filing of the case. Any creditor who intentionally violates this court order may be liable to the debtor in damages. The most common actions not affected by the filing of a chapter 7 case are criminal proceedings and actions for the collection of debts for alimony, maintenance, or support from exempt property or from property or funds acquired or earned by the debtor after the case was filed.

6. Does the automatic stay protect a debtor’s bank accounts?

The debtor’s money that is deposited the bank may or may not be taken by the trustee. This entirely depends on the bankruptcy exemptions claimed. A bankruptcy filing is also a great way to stop a creditor from seizing a debtor’s bank account. Quite often, a creditor will file a writ of execution that seizes all of the debtor’s money. Once the debtor’s bank account is frozen, then the creditor will have to file an application for the court to turn over these monies to the creditor. A bankruptcy filing will freeze this process, and the creditor will have to release the “freeze,” and the debtor can retrieve his much needed monies. In most cases the debtor will be able to have sufficient exemptions to retain his bank accounts. Only in the rare case will a trustee seize a person’s bank accounts. If a debtor has too much money deposited in a bank account, then he should consult with his lawyer as to whether a chapter 13 could be a better option.