Can Bankruptcy Stop Creditors from Calling?

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11 U.S.C. §362(a)(6).  So, can creditors stop creditors from calling?  Yes.

A creditor who violates the Automatic Stay can be sanctioned by the Bankruptcy Court. Sanctions for deliberate violations may include fines or even imprisonment for the most egregious violations.

However, there are exceptions to the stay for some creditors. A new debt which arose after the Bankruptcy was filed would not be covered. Other exceptions include:

a. criminal actions against the debtor;

b. many actions regarding domestic support obligations, paternity, divorce, child custody and visitation, domestic violence and division of property in divorce actions (if the property of the bankruptcy estate is not involved);

c. enforcement of certain medical obligations under Title IV of the Social Security Act;

d. various actions by the bankruptcy trustee involving property of the estate or enforcement of the Bankruptcy Code; and

e. various actions by federal government authorities including many actions to administer and enforce tax laws. There are other exceptions, many quite technical. For more detailed information, talk to a bankruptcy attorney.

Two additional caveats. First, the Automatic Stay will even prevent a creditor from acting against secured property (collateral). However, if arrangements have not been made to repay any payments on the secured debt a creditor may ask the Bankruptcy Court to “lift” the automatic stay, which would permit the creditor to enforce its lien against the debtor’s property.

Second, in a Chapter 7 case the Automatic Stay will expire when the debtor receives a discharge. The discharge is normally granted 90 days after the case was filed. A Chapter 13 discharge is granted at the completion of the Plan. Most plans last either 36 or 60 months. The discharge will then bar actions to collect, recover or offset any debt which has been discharged in the bankruptcy. It will stop lawsuits or void judgments based on a discharged claim. Discharge is an affirmative defense against a lawsuit on a debt which has been discharged. Minn. Rules Civ. Proc., Rule 8.03. There are few exceptions to the discharge injunction. 11 U.S.C. §524. But note that most, but not all debts are dis-chargeable. See What Debts Can Be Discharged in Bankruptcy?

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