Lawsuits, Collections, and Creditor Harassment

Being in debt is stressful, even without dealing with phone calls and letters from angry creditors. Constantly dealing with creditors can cost you valuable time and energy. As unpaid interest, late fees, and even legal fees accumulate, creditor activity can become an obstacle to paying off your debt and becoming financially stable.

If you have been sued, have an account in collections, or are being harassed by your creditors, an experienced bankruptcy lawyer may be able to help. Filing for bankruptcy offers debtors certain protections, such as the automatic stay, which can stop creditors’ attempts to collect on a debt.

Stop Creditor Harassment and Debt Collection Lawsuits Using Bankruptcy’s Automatic Stay

For debtors who are faced with creditors attempting to collect a debt, bankruptcy’s automatic stay provision may bring some relief. The automatic stay provision is designed to give debtors who have filed for bankruptcy some much-needed breathing room so that they can complete the bankruptcy process.

What is the Automatic Stay?

The automatic stay is an injunction issued by the bankruptcy court under 11 U.S.C. 362. Because bankruptcy courts are federal courts, the automatic stay can protect a debtor even from a pending state court action. The automatic stay gives a debtor protection from:

  • The filing of a collections lawsuit by a creditor;
  • Continuing lawsuits that have already been filed;
  • Repossession attempts;
  • Foreclosure sales; and
  • Wage garnishment or levies.

One of the best features of the automatic stay is that it goes into effect the minute a debtor files for bankruptcy. If a creditor violates the automatic stay, the debtor can seek actual damages, punitive damages, attorney’s fees, and court costs.

Can a Creditor Obtain Relief From the Automatic Stay?

Creditors can petition the bankruptcy court to lift the automatic stay. However, the bankruptcy court is unlikely to lift the stay if the creditor is an unsecured creditor and the debt will be included in the bankruptcy discharge. This means that the automatic stay can provide meaningful protection from debts such as:

  • Credit card debt
  • Legal or medical fees
  • Personal loans
  • Unpaid phone or utility bills

Is Bankruptcy the Best Choice for You?

Bankruptcy is not the best choice for everyone who is experiencing pressure from creditors. Other options can include negotiating a debt settlement with the creditors or hiring an attorney to file a lawsuit under federal laws that protect debtors from creditor harassment, such as the Fair Debt Collection Practices Act.

However, Chapter 7 or Chapter 13 Bankruptcy may be a good choice for individuals whose debts are largely unsecured. In these situations, bankruptcy’s automatic stay can offer debtors some temporary protection while the discharge of their unsecured debt in bankruptcy can offer more long-term protection.

Contact an Oakland Bankruptcy Attorney Today

If you are in debt and are experiencing creditor harassment or have had a collections lawsuit filed against you, do not wait – contact a bankruptcy attorney today. An experienced bankruptcy attorney can advise you on whether bankruptcy can put a stop to your creditors’ activities and whether your debts are dischargeable in bankruptcy. Call the Law Office of Melanie Tavare at 510-255-4646 or contact us online to find out if bankruptcy is right for you. We offer bankruptcy and debt collection defense for people in Oakland, San Francisco, Walnut Creek and other locations.

The Law Offices of Melanie Tavare is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.