Filing For Bankruptcy To Stop Creditors In Their Tracks

Because of the tough economic climate, many people are considering filing bankruptcy.
One of the greatest advantages of filing for bankruptcy, besides getting your financial life back in order, is that it will stop those aggressive creditors in their tracks.
Yes it is true, when an individual files for bankruptcy their creditors must stop calling them.
They must stop garnishing the debtor's wages, they must stop any law suits or judgments, repossessions, foreclosure proceedings, and all contact with the debtor.
In a nutshell, the creditors must stop everything they are doing to collect on the debt or take property from the debtor.
This is possible because when filing bankruptcy, the debtor receives the benefit of the automatic stay.
The automatic stay is a powerful legal tool that goes into effect the moment the case is filed with the court and prohibits creditors from contacting or taking any actions against the debtor.
There are a few exceptions to the automatic stay, which mostly includes matters of police power or marital obligations such as domestic or child support.
For most people however, the bankruptcy filing with its automatic stay provides real relief and a chance to take a deep breath and evaluate their financial situation without the constant pressure from harassing creditors.
After filing bankruptcy, if creditors continue to call the debtor, bother them, garnish their wages, or take any other action against them, the debtor should contact their bankruptcy lawyer immediately.
Creditors in violation of the automatic stay can face harsh penalties and fines from the court.
However, if the creditors acted innocently without knowing about the bankruptcy case, then you can inform them of the bankruptcy filing as well as the case number and they must stop all contact at that point.
If on the other hand, the creditors acted willfully, having knowledge of the bankruptcy case, not only can the bankruptcy lawyer make them stop, but the lawyer can ask the bankruptcy court to award actual as well as punitive damages and legal fees to the debtor.
To ensure that the debtor receives the advantages of the automatic stay, they must make sure that they provide their bankruptcy lawyer with a complete list of all of their creditors as well as the correct addresses so the court can send notices to the creditors of the bankruptcy filing.
Usually the address to give is the one that the individual would send the payments to.
If the debtor is unsure then they can call the creditor to obtain the correct address.
If the debt has been sold to a collection agency and the debtor is unsure of the new address, then they can list the original creditor and address.
It is not uncommon for an outstanding debt to be sold more than once to other collection agencies making it extremely difficult for the debtor to track down the newest creditor and address.
However, as long as the debtor lists the original debt and address in the bankruptcy filing, then the debt will be discharged.
The bottom line is, if an individual is considering filing for bankruptcy then they should seek the advice of an experienced bankruptcy lawyer in their area.
Once the case is filed and the protection of the automatic stay is in place, then the creditors legally must stop bothering the debtor.
If they do not, then they will find out that they may pay dearly.