What Can Be Done About Creditor Harassment?

Once you have filed your bankruptcy, you are under the protection of the Automatic Stay Order.

Many people choose to file bankruptcy to end what can become a seemingly endless barrage of phone calls, letter, and lawsuits from creditors.

There is nothing legally preventing creditors from calling you until your case is filed. There are limits on the collector conduct and for further information you should review the Fair Debt & Collection Practice Act. Until your case is filed different firms take different approaches to creditor harassment.

Morse Law, LLC encourages their clients to have the creditors call the firm after the client has deposited the first $100 of their fees. The first $100 on deposit lets the firm know that the client is actually serious about filing their case and not using the firm’s good name to simply and fraudulently delay the collection process.

When creditors call a law firm and the law firm represents that they have been retained for a bankruptcy filing, many creditors will cease the phone calls and collection activities against the client for several months. The reason for this is fairly simple. It costs the collection industry money to call and harass you. When these companies know that you have retained a law firm to file a bankruptcy, then they know that there is a very high likelihood that you will be discharging the debt that they are trying to collect on in the bankruptcy. For this reason, many creditors will cease their relentless calling for a few to several months. If enough time has passed since they were informed that you were filing a bankruptcy, and no bankruptcy has been filed, then they will assume that you were not serious in your attempt to file and will resume their collections.

Once you have filed your bankruptcy, you are under the protection of the Automatic Stay Order. This is a Federal Order making it illegal for creditors to commit any collection activities against you. Collection activities for the purposes of this order include anything from a phone call to a foreclosure – it is fairly broad in its scope and protection.

Some firms claim to file civil actions against creditors under the Fair Debt Collections & Practice Act. While this is a fine act that holds the collection industry accountable for their behavior, civil suits under this act, like most civil suits, have their recoveries seized by the bankruptcy estate. In most instances, when these claims are filed, the law firm will obtain a judgment or settlement form the collector, and the firm filing the action will receive payment, but the Debtor will not receive any monies. What monies the Debtor would have received will generally be seized by the bankruptcy court. The net result of these actions is often having the bankruptcy’s filing delayed so that the law firm can earn a few dollars, and the delay in filing leaves the Debtor further exposed to collection activities such as lawsuits and garnishments. Morse Law, LLC therefore, does not advocate these actions for persons seeking bankruptcy relief.

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Morse Law, LLC

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    Denver, CO 80202
  • 303-300-6684
  • 720-941-2755

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