The Bankruptcy Automatic Stay Stops Bully Collectors in Their Tracks

Bankruptcy Automatic Stay Violation by Bill CollectorsWhether you have even considered filing Chapter 13 or Chapter 7 bankruptcy yet, if you have ever been more than 90 days late paying a credit card, then you may have already suffered the indignity of an aggressive bill collector’s call. If you haven’t yet, but you can’t make all your credit card payments, you’ll likely soon know what a personally demeaning experience calls from these two bit street bullies can be. Believe it or not, I regularly speak with these same bill collectors on the phone too. I get calls from bill collectors nearly every day because they’re calling to confirm whether or not I represent a new client who hasn’t yet filed for bankruptcy protection (so her creditors haven’t yet received notice of the bankruptcy filing directly from the Bankruptcy Court). The new client, at our suggestion, has told this bully that she has retained our Bay Area bankruptcy attorneys, and to stop harassing her and instead to call her bankruptcy lawyer to confirm representation, which we are always happy to do.

Whenever I speak to these, um, gentlemen (they’re invariably male), I often think back to a text I was assigned for a sociology class nearly twenty-five years ago as an undergrad. It was a study in how certain jobs—bill collectors were one of the prominent jobs studied—are required to perform labor with a uniquely emotional component. The basic thesis was that, in the case of the bill collector, for example, the worker was required day in and day out to perform “emotional labor”, that is to conjure up feelings of hostility and dehumanizing hate for the people they call toward human beings they do not know, and how emotionally exhausting and dehumanizing such work inevitably is for the collector. The turnover rate in these positions is generally quite short as you might imagine.

Yeah, okay, well, my heart just bleeds for them. I’m sorry for my lack of sympathy for these bill collection bullies, but as we all know some jobs just attract a certain type. And believe me, they’re just as obnoxiously rude to me as they are to my clients, perhaps even more so, because they’re even angrier now that they know the protections of the bankruptcy Automatic Stay are about to shut them down.

When my clients file for bankruptcy protection, and it doesn’t matter whether we’re talking about Chapter 7 bankruptcy or Chapter 13, or any other chapter of bankruptcy for that matter, the first protection every one of my clients gets is the Bankruptcy Automatic Stay under Bankruptcy Code section 362.

The Automatic Stay in bankruptcy protects my clients from every form of debt collection activity while his bankruptcy case is pending, with one narrow exception for auto loans, as described below. This means that while the Bankruptcy Automatic Stay is in effect,  they can’t call you. They can’t evict you. They can’t foreclose on you. They can’t continue garnishing your paycheck. They can’t continue in an underlying state civil lawsuit against you. They can’t do anything to collect debts against you. And, importantly, all the degrading collections calls must stop as soon as the bankruptcy case is filed.

Unfortunately, the anti-debtor, pro-big bank set of Bankruptcy law changes embodied in the 2005 BAPCPA do contain an important exception to the Automatic Stay of Bankruptcy with respect to auto loans  If the bankruptcy debtor refuses to sign an auto loan reaffirmation agreement with respect to an auto loan, then the auto loan creditor can repossess the vehicle without asking the Bankruptcy Court for permission through a conventional motion for relief from stay. These cases present a thorn in the side of debtors, consumer bankruptcy attorneys, and even bankruptcy judges.

But what happens if a creditor willfully violates the Automatic Stay? The Automatic Stay is a Bankruptcy Court order. As such violation of that order constitutes contempt of the Bankruptcy Court. Whenever a bankruptcy client of mine informs me of even the slightest violation of the Bankruptcy Automatic Stay, I take such violations seriously. I have successfully prosecuted many law suits against creditors for violating the Automatic Stay, with the result that such bullies end up paying Bankruptcy Court sanctions for their contempt of court.

If you are being bullied by daily calls from bill collectors, it’s time to talk to a Bay Area bankruptcy attorney. We exist to restore your dignity and offer you a new life free from debt. Call us for a free consultation at 408-286-2766.

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