BankrupTCY: creditor contempt

Generally, when you file a bankruptcy, whether Chapter 7 or Chapter 13, your creditors are prohibited from contacting you because of the automatic stay. And once you receive your discharge, your creditors are prohibited from attempting to collect any of your discharged debts. This is known as the discharge injunction. If your creditors violate either the automatic stay, or the discharge injunction you may be entitled to relief.

The automatic stay, as its name suggests, is automatic. Meaning, when you file bankruptcy, your creditors are prohibited from contacting you in an effort to collect most debts. However, the creditor must have notice of your bankruptcy. This most often occurs when you file bankruptcy, and a notice is sent to your listed creditors. If a creditor was not listed, you may be able to amend your schedules to include the creditor. After receiving notice, a creditor generally cannot:  

·       File a lawsuit against you

·       Continue a pending lawsuit against you

·       Enforce any judgment against you or your property

·       Repossess, or take any action, to possess your property

·       Enforce or attempt to enforce any lien against your property

·       Levy your bank account

·       Garnish your wages

·       Otherwise attempt to take your property or money

However, not all creditor actions are prohibited, so if you have any questions, contact an experienced bankruptcy contempt lawyers.

Like the automatic stay, the discharge injunction is automatic once your discharge is granted. And as with the automatic stay, the creditor must have notice of your bankruptcy. The discharge injunction prohibits a creditor from attempting to collect a judgment against you. In particular, it:

·       Voids judgments against you

·       Permanently stops pre-existing lawsuits from continuing

·       Stops lawsuits being filed against you based on discharged debts

·       Prohibits debt collectors or creditors from attempting to collect a discharged debt.

Not all post-discharge collection activities are prohibited, depending on the type of debt. If the debt was non-dischargeable, such as most student loans or recent past due income taxes, creditors may continue their collection activities. If you have questions, please contact our discharge injunction attorneys.

If a creditor has violated the automatic stay or discharge injunction you may be entitled to the following:

·       Compensatory Damages

·       Punitive Damages

·       Costs

·       Attorney Fees

These remedies are potentially available wherever you file, whether it’s Helena, Butte, Anaconda, Deer Lodge, Great Falls, or anywhere else in Montana. If you are being harassed by a creditor after you file bankruptcy, contact our bankruptcy attorneys today.