Creditor Harassment Attorney in Springfield
Protecting Clients From Intimidation By Creditors
Protecting your assets from creditors and eliminating harassing phone calls, mail, and other collection efforts is a benefit of filing bankruptcy. Once your bankruptcy is filed you have legal protection to stop harassment from collection agencies in Springfield, Missouri.
How Does Bankruptcy Stop Creditor Harassment?
Whenever a Chapter 7 or Chapter 13 bankruptcy case is filed, there is an automatic stay that goes into effect. The automatic stay is an injunction, or a prohibition, on a creditor from taking action to collect a debt from someone that has filed bankruptcy.
The automatic stay protects people from any type of collection effort including lawsuits, garnishments, creditor phone calls or letters, vehicle repossessions, and home foreclosures.
How Long Does the Automatic Stay Last?
The automatic stay lasts until either a case closes or is dismissed. However, there are some exceptions:
- A creditor can file a Motion for Relief from the Automatic Stay. If the court gives the creditor relief from the stay, the creditor can pursue certain remedies to enforce their debt. Typically, this scenario arises when someone filing for bankruptcy relief has a secured debt, like a vehicle or house loan, and it is their intention to surrender the vehicle or house as part of the bankruptcy. Even if it is the intention of the person filing for bankruptcy relief to surrender the asset, the creditor must still have permission of the bankruptcy court to proceed with the repossession or foreclosure unless 30 days has passed from the first setting of the 341 meeting.
- The automatic stay is limited to 30 days if you had a previous bankruptcy case dismissed within a year of the filing of another case. An experienced Chapter 7 or Chapter 13 bankruptcy attorney can file a motion with the court to extend the stay past the 30-day time frame if the case warrants an extension.
- The automatic stay does not go into effect if you have had two previous bankruptcy cases dismissed within a year of the filing of the third case. An experienced Chapter 7 or Chapter 13 bankruptcy attorney can file a motion with the court to impose the stay in certain circumstances. During a Chapter 13 case, the automatic stay also applies to codebtors, or people who are cosigned on debts with you. This is called the codebtor stay. It is important to remember that the codebtor stay only applies to consumer debt, not business debt. This means that while you are in a Chapter 13 case, a creditor cannot pursue anyone who is cosigned on a debt with you unless they have prior court permission to do so.
What Happens If a Creditor Violates the Automatic Stay?
If a creditor violates the automatic stay by continuing to pursue you for a debt that was listed in your bankruptcy case, the creditor can be penalized for violating the stay.
An experienced bankruptcy attorney can file a Motion for Sanctions against a creditor that fails to abide by the stay and the creditor can be ordered to pay damages and attorney fees for their violation.
Talk to one of our skilled Springfield attorneys and find out how an automatic stay can provide protection from creditors and help stop harassment from collection agencies. Call our office at (417) 213-5006 or complete our online contact form today.