Creditors these days have gotten pretty aggressive at their tactics of attempting to collect debts. In fact, this is usually the reason that forces individuals into filing bankruptcy just because they can't take the constant harassment anymore. Filing bankruptcy is supposed to stop all collection efforts as soon as the petition is filed. This is the hard-core protection that debtors are looking for and why filing bankruptcy ranks at the top for a way of eliminating debt. Lately, even with the protection of the automatic stay creditor harassment is getting out of control. Debt collection companies are pushing it to the edge and sometimes beyond.
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With some creditors it might be a lack of understanding, where the right hand doesn't know what the left hand is doing. In this case, it can be simply corrected by notifying their legal department of the pending bankruptcy filing. Then you have some debt collection companies that are totally going rogue. They have an evil attitude that totally disregards the automatic stay court order. These are the creditors that definitely need to have their wings clipped. The good thing is the debtor filing bankruptcy can be paid for this unruly harassment.
When a creditor gets called to the carpet for violation of automatic stay they will always ask the court for confidentiality. I guess they don't want the world to know of their horrendous behavior for they might be afraid that all the other debtors that they are terrorizing will jump on the bandwagon filing complaints against them. Many creditors have fought to keep settlement agreements from being published for full public disclosure. Most courts disagree because they believe that this settlement of a creditor violation against an individual filing bankruptcy should be available to public eyes for transparency. The court feels that the integrity of the bankruptcy relies on a transparent system.
When a creditor continues to harass a debtor after they had been notified of them filing bankruptcy, the debtor should contact their bankruptcy attorney immediately. The automatic stay is very clear about stating how a creditor should have no contact with the debtor during this time. This means no phone calls, nasty letters or even the e-mails continuing on trying to collect on the debt. The bankruptcy attorney representing the debtor should be able to get sanctions against the creditor for the violation. Depending on how egregious it is the court can even award the debtor damages against the creditor.
The Fair Debt Collection Practices Act is another law that puts teeth into creditors that just don't seem to want to play by the rules. After a judge slaps the creditors around a little bit, they'll usually back down.
Most creditors don't intentionally violate the law, but there are many collection agencies that push the edge to grind as much out of a debtor with threats and name-calling. People filing bankruptcy have the power to stop this quickly. All it is a simple phone call to their bankruptcy attorney to put them back in line. Filing bankruptcy is a powerful tool to stop creditors as long it is used to the full extent of the law.
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