After bankruptcy, you might get a call or a bill on a debt that was discharged in your case. Trying to collect a discharged debt during or after the bankruptcy is a violation of the bankruptcy stay–while your case is open–or bankruptcy discharge, once your case is closed.
Don’t get upset, but do take action.
Most judges don’t want to hear about problems “that could be fixed with one phone call,” so I have a benefit of the doubt policy–three steps.
Step one: Tell the creditor you filed bankruptcy. You want to say, I filed bankruptcy; you cannot contact me, call my lawyer, Robert Weed, at 434-993-5101. You can say that on the phone, or write it on the bill and mail it back. That solves most of these problems.
Mistakes happen and most of these contact are just mistakes. Don’t be paranoid, but do keep notes!
Step Two: If you get a second contact, email your paralegal. Let them know that you told the creditor to call us and now you’ve gotten another contact. If it’s a letter, scan and email the letter if you can. If it’s a call, the phone number and person’s name if any.
Your paralegal will contact the creditor and let them know they are about to be in trouble. If there’s another call or bill, we’ll sue.
Step Three: If the creditor keeps up after two warnings, we drag them in front of the bankruptcy judge. This is illegal harassment! Even the most patient judges (and our judges here are pretty patient), will be mad at a creditor who contacts you three times after the bankruptcy.
We don’t get a lot of money in Virginia when we sue on these. If they call or bill you when your case is open, the judge can award emotional damages and punitive damages for violating the bankruptcy stay. Once the case is closed, about all you can get is attorneys fees for violating the discharge. (In other words I get paid, you just get the creditor to stop. The Fourth Circuit says you don’t get anything for being harassed or annoyed–only if you can’t sleep or throw up or something.)
Do the creditors always get the benefit of the doubt? No, they don’t. Our biggest exception is if you get a smart remark when you tell them to call your lawyer.
“Bankruptcy only covers the principal -this is for interest.”
“Our bank didn’t accept your bankruptcy filing.”
“Your lawyer filed the wrong kind of bankruptcy.”
If you get a smart remark like this, write it down and contact your paralegal right away. They get to explain that BS to the judge without a second warning.
Do you always sue? Laws, like locks, remind honest people to stay honest. They don’t do much for criminals. Sometimes, usually but not always on a payday loan, your debt ends up with a debt collector that’s part of “digital organized crime.”
These people know what they are doing is illegal and don’t care. You can often tell them by their outrageous threats. “The sheriff is bringing a warrant around to your house tomorrow.” And they often want you to make a payment–right away–by a service that’s hard to trace like Western Union Quick Collect.
The FBI might be able to find those guys–I won’t be able to. The best you can do, is file a complaint with the Federal Trade Commission. That might eventually get them shut down.
PS Judge Brian F Kenney, here in Alexandria, VA, takes a much narrower view of consumer protections in bankruptcy law than Judge Stephen Mitchell used to. I’m saving one of Judge Mitchell’s decisions here In re Gates.