FILING FOR BANKRUPTCY IMMEDIATELY STOPS THOSE PHONE CALLS

One of the reasons people decide to file for bankruptcy is because they are being hounded by the credit card companies day and night. This can be stopped immediately once you file for bankruptcy. Under the bankruptcy law the filing of a bankruptcy “petition” operates as a stay (which meaning “the stopping”) of the following:

1. The commencement or continuation of a lawsuit or other action against the debtor.
    In other words, if someone has filed a lawsuit against you, the filing of the bankruptcy
   stops it.
2. The enforcement of a judgment against the debtor. In other words ,if a person has obtained a judgment against you, he cannot move forward on that judgment and try to collect monies.
3. Any act to create, perfect or enforce a lien against your property.
4. Any act to collect, assess or recover a claim against you. This prevents the credit
   card companies from calling you, sending letters to you or doing anything in an attempt to collect the debt.

Any attempt to collect a “pre-bankruptcy” debt against you violates the automatic stay and can result in penalties against the credit card company.

In a recent case that came before the Bankruptcy Court in Miami, the creditor had obtained a judgment against the debtor (Claudia Hernandez) .On January 6, 2009, the creditor obtained a Writ Of Garnishment on the wages of Ms. Hernandez. On March 18, 2009, Ms. Hernandez filed for bankruptcy however, the creditor continued to garnish her wages. The bankruptcy court held that “the creditor has an affirmative duty to stop, halt or stay the garnishment proceedings when they are in violation of the automatic stay...Moreover, the creditor is required to notify the garnishee/employer of the effect of the automatic stay, seek dismissal of the garnishment and direct the garnishee/employer to release the frozen funds” The Court found that because of this violation, Ms. Hernandez was entitled to sanctions against the creditor.

There are many different examples as to how the automatic stay law is applied. For example the courts have held that universities may not withhold transcripts in an effort to compel the debtor to pay a pre-petition debt.