An automatic stay violation in bankruptcy often gives rise to a cause of action for the debtor. When you file bankruptcy, the automatic stay affords you protection from creditor attempts to collect on debts until the automatic stay ends. This includes phone calls, mailings or any other communication requesting payment. In some limited cases, an attempt to collect or move forward with a proceeding is not an automatic stay violation. Examples include child custody, criminal lawsuits and eviction cases.
The automatic stay applies to pre-bankruptcy debt. Any debt incurred after the filing of the bankruptcy is not protected by the automatic stay and so attempts to collect on post-bankruptcy debt is not an automatic stay violation. The date of the bankruptcy filing is the date the automatic stay begins.
What Rights Do I Have?
If there has been an automatic stay violation, your attorney should send a written letter to the creditor informing them they are engaging in an automatic stay violation, request the demand for payment be withdrawn within ten days of receipt of the letter, and inform the creditor a motion for sanctions will be filed if not.
An automatic stay violation is evidence of a creditor’s poor communication system regarding bankruptcy filing and collection practices and increases legal fees and time and expense for all parties. If evidence is presented the court to satisfy the court that there has been an automatic stay violation that continues after the attorney letter, clients and their attorney are most often awarded damages.
If you have a question and would like a free phone consultation regarding an automatic stay violation or any other bankruptcy related question, please call me at 704.749.7747. I’m here to help.