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What Can Bankruptcy Stop? Will Creditors Stop Calling Me?

The filing of a bankruptcy case prevents all creditors from commencing or continuing any action against the person filing (debtor) regarding all collection claims for money; or, the enforcement of claims against the debtor’s property, due to money that is owed to a creditor. In general, bankruptcy protects people from bill collectors that are attempting to sue for money or take someone’s property due to money owed. Typically, bankruptcy is not the forum to protect oneself for matters that concern property, where money is not involved.

The bankruptcy code states that a bankruptcy filing initially stops an entity from exercising possession or control of the debtor’s property. However, if the entity that is attempting to control the property is acting due to an issue other than money owed, the bankruptcy court will permit the entity to pursue the action. For example, if an individual is violating a local ordinance by housing hazardous materials, the bankruptcy court will allow the town to commence an action against the homeowner for compliance.

The bankruptcy filing stops the ability of a creditor to pursue any action against the debtor immediately upon the filing. Therefore, the creditor must cease all action against the debtor at the time of the filing, no matter what point in the legal process. If a creditor did not file a lawsuit at the time of the filing, the creditor may not file the lawsuit. If the bankruptcy case is filed after the creditor obtained a judgment and is intending to levy on a bank account, the creditor cannot levy on the account.

A bankruptcy filing stops any creditor from:

filing a lawsuit;
contacting the debtor by any means;
foreclosure action;
eviction action;
loss of drivers’ license due to surcharges, only;
utility termination;
bank account levy;
wage garnishment; etc.

Please contact the Bankruptcy Lawyer Robert Manchel at 1 (866) 503-5655 to discuss how bankruptcy can protect you.

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