Jeffrey B. Irby
What Happens to My Creditors and Bill Collectors After I File for Bankruptcy?
Many people today choose to file for bankruptcy so they can to wipe their debt clean, even though bankruptcies in America have slowly reduced since 2010, according to a study reported by The Ascent, an online money managing concierge. Once the bankruptcy has been officially filed, this prohibits any debt collectors or creditors from contacting you.
I understand how stressful it can be to make the difficult decision to file for bankruptcy. If you’re still being contacted to pay your debts, that can only add to the stress you are already experiencing. Creditor harassment after bankruptcy is illegal, so if this is happening to you, contact my office in Huntsville, Alabama to take control of the situation with the help of an experienced attorney.
At What Point in the Process Should Communication Stop?
When you filed for bankruptcy in Huntsville, Alabama, there are two terms that you may have heard of that are essential to remember: general discharge and automatic stay.
- General discharge is the final “okay” signaling that you have correctly completed the bankruptcy process and begins the temporary period when debt collectors can no longer reach out to you, including call, email, post, text, and in-person.
- An automatic stay is an injunction that makes it illegal for creditors or bill collectors to contact you in any way. One way they can circumvent this rule is if their contact has been permitted by the bankruptcy court.
Automatic stays begin their run almost immediately after you have completed your bankruptcy filing. Depending on the firm, some debt collectors may not have software that receives the notice of general discharge immediately.
Over time, you will see a decrease in the number of people trying to contact you, however, this ban will not last forever.
How Long Does Automatic Stay Last?
The length of time that your automatic stay is in effect depends on your case. The stay remains activated until the petition for your bankruptcy is dismissed or if a federal judge grants relief to a creditor, but a creditor must first file a motion for this to happen.
Why Could an Automatic Stay Be Lifted?
Under rare circumstances, the court may file a motion to allow bill collectors to resume reaching out to you for money, for example:
- Home mortgage lenders know your property is of significant value and is uninsured
- You have defaulted home mortgage payments
- A partial stay may be granted allowing for the necessity of divorce, excluding property division
- A bank may be allowed to proceed with foreclosure if there’s no equity in the property and it was not part of the reorganization of debt
Automatic stays are not often lifted, however, if they are, you have the right to be notified and take part in a hearing. Federal bankruptcy judges have 30 days to set a preliminary hearing for the motion to lift, and an additional 30 days to set a final hearing.
Let An Alabama Attorney Fight Against Your Creditors
If a debt collector has violated an automatic stay by contacting you or you were not notified of a motion or hearing to lift the automatic stay, contact my Huntsville, Alabama law firm — Jeffrey B. Irby, P.C. — immediately so I can help you stop calls from bill collectors.
For more than 20 years I have witnessed clients experience great stress and emotional strain as they go through the process of bankruptcy. On top of that, bill collectors who are illegally contacting them can make their stress even worse. I am here to help relieve that stress; let my extensive experience as a bankruptcy attorney do the heavy lifting so you can focus on reaching financial independence once again.
My office in Huntsville, Alabama has clients from all over Madison and Jackson County and Northern Alabama.
Schedule a free consultation today by calling or filling out the form below.