Don't Give Them Any Credit: How To Handle Your Creditors During Bankruptcy
If you are preparing to file bankruptcy, you may have had more than a few upsetting phone calls and other communications from your creditors. Although bankruptcy is designed to stop this, it is generally not instantaneous. The good news is that you can protect yourself during your bankruptcy. Keep reading to learn how to handle your creditors as you navigate through the bankruptcy process.
Before You File
Even though you may have already hired a lawyer, you might not have filed for bankruptcy yet. During this pre-filing phase, your creditors can still legally contact you about your debt, as long as they follow the debt collection laws.
Although you can't tell your creditors to take a hike at this point, you can (and should) advise them that you intend to file bankruptcy. Because you do intend to file for bankruptcy protection, it usually isn't advisable to negotiate repayment deals with creditors at this point. If repayment will take place, it will occur during the course of liquidation (in the case of chapter 7) or the creation of the debt agreement (in the case of chapter 13).
After You File
Once you have filed for bankruptcy, all communications related to your debts should cease. The court issues an automatic stay, which is a legal action that informs creditors they may not contact you about your debts any longer.
Usually, the automatic stay is issued immediately, but it's possible that the notice of the stay won't reach the creditor for a couple of weeks. They may, therefore, continue to call you as they are unaware of the bankruptcy filing. If your creditors are calling in the days and weeks immediately after you file for bankruptcy, simply inform them that you have filed the bankruptcy petition.
Your creditors, once informed of the fact that you have filed a bankruptcy petition, must cease contact immediately. You may also want to tell overly persistent creditors to direct all further communications to your lawyer.
After Bankruptcy Dismissal
After your bankruptcy has been dismissed, you should not hear from your creditors again, unless you have filed a chapter 13 bankruptcy and entered into a repayment agreement with them.
A bankruptcy allows you a fresh start. Your creditors may not love the fact that they won't get their money, but it is your legal right to have this fresh start. Your creditors have to follow the laws discussed above, so make sure that you hold them to it. Talk to a professional like Thomas Corletta Attorney for assistance.
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