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When collection calls continue after bankruptcy

When debt becomes overwhelming for a Louisiana resident, bankruptcy is an option. One of the benefits of filing for bankruptcy is the automatic stay, which means that creditors and bill collectors are legally prevented from making contact to collect payments. However, some collection efforts continue after bankruptcy is filed. While this could be an innocent mistake due to a creditor not having yet heard about the bankruptcy filing, it might be a willful violation of the automatic stay. When the latter happens, the creditor or bill collector can be held accountable.

When someone files for bankruptcy, the automatic stay technically goes into effect immediately. In reality, however, it takes time for creditors to find out that they are no longer allowed to contact the debtor. There are various ways that creditors might receive this information, including by email, subscription to services that inform them of bankruptcies or paper notice from the court.

Collection efforts that are made within a few days of filing bankruptcy could be pardonable because the creditor did not yet know about the bankruptcy. However, collection calls or other contacts that persist could be willful violations of the stay. Creditors that are found in violation of a stay could be liable for damages that occurred to the debtor.

An automatic stay is part of every bankruptcy, no matter which type is filed. Chapter 7 is the most common type of personal bankruptcy, but not everyone is qualified to file Chapter 7. To be eligible, someone must pass a means test. If the person's income or assets are too high, they could still be eligible to file Chapter 13. This type of bankruptcy involves repayment of some debt before the remaining debt is discharged.

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