When you file a bankruptcy case, an “automatic stay” is put in place that legally protects you from any creditors attempting to collect money from you. The automatic stay will stop calls from collection agencies to collect money from you, sending you collection letters, suing you, and initiating or continuing garnishments of wages or bank accounts.
Normally, most creditors are respectful of the automatic stay and will cease collection efforts as soon as they receive notification of your bankruptcy. But, what happens if a creditor continues to harass you even after your bankruptcy case is filed?
We had a Licata Bankruptcy Firm client that was continuing to be harassed by a creditor after their case was filed. This creditor was repeatedly contacting our client and threatening to repossess their property even after this creditor had been notified of their bankruptcy case filing. This creditor’s actions were clearly a violation of the automatic stay and were causing our client's emotional distress.
In order to protect our clients from further harassment, our bankruptcy firm filed a Motion for Sanctions against the creditor. A Motion for Sanctions is a request for the court to enter a judgment against this creditor for violating the automatic stay. In this case, our firm requested that the creditor be required to pay our clients money for continuing to harass our clients after their case was filed and to pay their attorney fees associated with the time associated with preparing and prosecuting the motion.
After hearing testimony from our clients and arguments from our attorney, a federal bankruptcy judge awarded the clients $1,250.00 for these repeated violations of the automatic stay and $1,000.00 in attorney fees.
Filing bankruptcy will get you a fresh start. No matter how aggressive creditors maybe before your case is filed, they can be financially penalized for attempting to collect money from you after your case is filed.
If you are being harassed by a creditor or a collection agency, a free consultation will allow our bankruptcy attorney to assess your situation and help you determine if filing bankruptcy is the best way to stop calls from collection agencies in Springfield Missouri.