Whether you call it a collection attempt or harassment, the fact is that creditors call. They call at home and at work; they call home and cell phones; and they call bosses and family members. Whether a collection call is “legal” depends on many factors. The most powerful protection from a creditor call is from the federal bankruptcy laws, but even that protection depends on the situation. So, what should a person tell a collector during bankruptcy?
Before Filing Bankruptcy
The Bankruptcy Code does not apply to protect an individual from creditor calls until the case is filed. Simply retaining an attorney is not enough. However, other federal laws may protect the individual until the case is filed with the bankruptcy court. For instance, the Telephone Consumer Protection Act restricts certain collection calls to cellular phones. Additionally, under the Fair Debt Collection Practices Act (FDCPA), a third party collector may not continue to call a debtor after an attorney is hired in connection with the debt, including a bankruptcy attorney. The FDCPA does not apply to calls from original creditors. Before a bankruptcy case is filed, any collector should be told, “Don’t talk to me, call my lawyer!”
During the Bankruptcy Case
Once the bankruptcy case is filed, the bankruptcy automatic stay stops all collection calls. The automatic stay is specifically intended to stop creditor harassment and allow the debtor a “breathing spell” to organize personal finances. As a courtesy and to avoid future calls, a bankruptcy debtor should refer all collection calls after filing bankruptcy to his or her attorney’s office. Tell the caller, “I filed bankruptcy, call my lawyer!” Make a record of the call and inform your attorney. If a creditor or third party collector knowingly violates the automatic stay, the bankruptcy court may find that individual or organization in contempt of court, which may include a fine, and an award actual damages and attorney fees.
After the Bankruptcy Discharge
A debt that is discharged during bankruptcy is no longer legally enforceable against the debtor. The federal Bankruptcy Code prohibits creditors from contacting debtors for the purpose of collecting discharged debts. If contacted, a debtor should tell the caller, “This debt was discharged in bankruptcy. Call my attorney!” Make a record of the call. Bankruptcy courts take creditor harassment after discharge very seriously and may find the collection agency or creditor in contempt of court.