Debt Collection after Bankruptcy: What You Should Know

Couple Calculating Finances — Overland Park, KS — Wiesner & Frackowiak LCIf you’ve filed for bankruptcy to try and settle overwhelming financial debt, you might be concerned about the possible actions debt collectors might still try to take against you. You can fight against any possible illegal actions of debt collectors if you understand your rights and learn what these collectors can and can’t do legally.

Phone Calls Should Stop

In most cases, collectors are prohibited by law from contacting anyone whose bankruptcy was approved. The only exceptions may be if a collector has the court’s approval to still contact you or if they plan to file a lawsuit against you for any uncollected debt that wasn’t settled in your bankruptcy case. Collectors might also contact you by mistake and not be in legal trouble if they weren’t notified of your bankruptcy.

Phone Calls to Your Associates Should Also Stop

Under the Fair Debt Collection Practices Act, collectors can only contact your family members, your employer, or other personal or professional associates to try to find out your current location if they can’t reach you to discuss your debt. There should be no reason for any collector to contact these people to ask about your location if your bankruptcy petition has been approved.

Wage Garnishments Are Usually Prohibited

If a collection agency wants to garnish your wages to try to satisfy your debt or is already in the process of doing so, bankruptcy usually puts an end to all lawful wage garnishments. One of the best ways to ensure that all wage garnishments stop is by filing for Chapter 7 bankruptcy, and your attorney can help you with everything that’s needed to get approved for this form of bankruptcy.

Legal Action Should Not Cost You

If a creditor or debt collector breaks the law and contacts you after your bankruptcy discharge, you likely won’t be required to pay any fees to take legal action against violators. You might even be awarded additional compensation for statutory damages if you and your attorney can prove unlawful contact by a creditor or debt collector.

Protection Even While Your Bankruptcy Petition is Pending

Harassing calls from collectors and other collection efforts are supposed to stop as soon as your bankruptcy petition has been received by the court and while a petition review and your case are pending. However, if your petition is denied, you’ll likely start to receive phone calls again until your debt has been paid or you try to qualify under a different bankruptcy chapter.

Bankruptcy May Stop IRS Tax Collection Efforts

The Internal Revenue Service (IRS) may also try to contact you for unpaid taxes, but IRS representatives are often forbidden from doing so after a bankruptcy approval. However, the IRS may still require you to file your taxes and submit your income details even if they can no longer pursue monetary collection because of your bankruptcy.

Collectors Can Try to Collect Future Debts

Bankruptcy doesn’t protect you for life against debt collection, and collectors may start calling you again if you have any unsatisfied debts that you’ve accrued after your bankruptcy. You can try filing for bankruptcy again if the debt and harassing phone calls from collectors become overwhelming, but you’ll likely have to wait at least a few years after your previous filing to file again.

Phone calls from debt collectors can cause you a lot of stress and have harmful effects on your personal and professional life. Bankruptcy may be the best way to put an end to these harassing phone calls and other collection activities. Contact an attorney for a consultation to learn more about the advantages of filing for bankruptcy and how you may qualify for this option.

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