Many of my Atlanta clients already know that filing bankruptcy initially stops foreclosure, garnishment, or other creditor actions. When a person files bankruptcy, the court issues an order “staying” creditor actions. This order is applicable during the entire time that the Chapter 7 or Chapter 13 case is pending, and no creditor can proceed against the debtor or the debtor’s property without court permission.
What bankruptcy filers sometimes do not know is that the court’s final discharge order also protects creditors from coming back and seeking payment, garnishing, or even contacting the debtors after the debts have been wiped out.
That means, if you filed a Chapter 7 bankruptcy and it was closed and discharged by the court, a subsequent contact by a creditor listed in the bankruptcy petition could be a violation of the law. If you filed a Chapter 13 bankruptcy, it lasts between three and five years, and any contact during that time or after the case is closed could also be a violation.
Examples of violations are:
- creditor phone calls seeking payment;
- creditor letters seeking payment or threatening foreclosure/garnishment;
- repossession, foreclosure, or garnishment;
- continuing a court case or lawsuit against you;
- obtaining a judgment against you;
- any threats related to debt whatsoever.
Some exceptions are:
- nondischargeable child support/domestic support;
- nondischargeable tax debt;
- foreclosures after the discharge when the homeowner stops paying on the mortgage or after the creditor files a motion to lift stay and obtains an order allowing foreclosure or other action;
- repossession after the discharge when the debtor stops paying on the vehicle or after the creditor files a motion to lift stay and obtains a court order allowing repossession;
- repossession after the debtor fails to pay on a reaffirmed debt.
Creditors who seek payment, garnish wages or bank accounts, repossess or foreclosure without court permission any after the initial filing of any type of bankruptcy may be subject to sanctions or punishment by the court. That means a violating creditor could be ordered to pay your attorneys’ fees, actual damages, emotional damages, and punitive damages for the wrongdoing.
In Georgia, courts have awarded such fees against creditors for wrongfully repossessing vehicles, threatening debtors, and other violations. Further, the Fair Debt Collections Practices Act, a federal law, prohibits creditors from violating the bankruptcy protection order.
If you think creditors are improperly seeking to collect money from you and wish to talk to an Atlanta bankruptcy attorney, please call the Law Offices of Charles Clapp at 404.585.0040 for a free consultation.