If you are one of the many Americans who are overwhelmed with debt, you may receive a host of calls from creditors and collection agencies who are trying to collect past due amounts on your financial obligations. These calls can become quite harassing, as collectors may start calling at all hours of the day and night in an attempt to get you to make a payment. Once you file your bankruptcy papers with the court, an automatic stay is placed on your name and creditors are no longer able to contact you regarding your debt. In fact, when the automatic stay is in place, collection agencies and creditors must stop any wage garnishments, and cannot pursue any lawsuits that may have been initiated on your case. This includes all actions and methods that are used to collect a debt.
The Fair Debt Collection Practices Act prohibits certain actions from creditors and collection agencies, including the use of unfair, abusive and deceptive practices. These entities are not able to threaten legal action, misrepresent how much money you owe or threaten to harm your family or property if the debt is not paid. Creditor harassment should be reported and is illegal under the act.
When you file your bankruptcy paperwork, it is important that you list all of your creditors, as these are the companies that will be issued the automatic stay. While some automatic stays are temporary, they will keep collection agencies away as you finish your bankruptcy paperwork and work toward discharging your debt.
This information is intended to educate and should not be taken as legal advice.