Bankruptcy doesn’t just help you get a fresh start financially. It also provides specific legal rights designed to protect consumers from creditor efforts to collect on pre-bankruptcy debts while they are in a bankruptcy. During bankruptcy, these protections are called the “automatic stay” (11 U.S.C. § 362). Congress included the automatic stay in the bankruptcy code specifically to allow consumers breathing room from creditor’s collections efforts as they work to get back on a solid financial footing. After completing their bankruptcy the Bankruptcy Code provides consumer debtors with a similar, permanent right to be free from creditors’ attempts to collect on certain pre-bankruptcy debts, which is called the “discharge injunction” (11 U.S.C. . § 524).
A “stay” is one of the special protections afforded when you file for bankruptcy. Under a stay, your creditors are prohibited from contacting you about pre-bankruptcy debts and from trying to collect on those debts. In addition, a stay stops actions like foreclosures, repossessions and legal actions to lay claim to collateral used to secure a debt. When a creditor violates a stay, you have the legal right to compensation for your damages.
In addition to the automatic stay, bankruptcy may also allow your debts to be discharged, which means you will no longer be legally responsible for those debts. When a creditor continues to seek repayment for debts that have been discharged, they’re in violation of bankruptcy laws. As with a stay violation, you may have the right to seek compensation for your damages, and the court may impose other penalties against the creditor.
Kellett & Bartholow Can Help
If you’ve filed for bankruptcy and you suspect your rights have been violated, we can help. Kellett & Bartholow PLLC helps clients protect their rights after they’ve filed for bankruptcy. Contact Kellett & Bartholow PLLC today to learn how we can help you.