What are consumer rights under bankruptcy?

Consumer rights under bankruptcy include an automatic stay. This action starts the moment the file has been submitted to the court and a file number has been given. From here, creditors cannot make unreasonable contact with the petitioner. "Reasonable" is defined as 1 or 2 calls before they have received notice. "Unreasonable" is when the creditor ignores the automatic stay and makes continuous contact such as phone calls to the debtor.

Consumer Rights Under the Automatic Stay

When the creditor harasses the debtor, the creditor opens themselves up to a lawsuit. They can be fined a minimum of $1,000 for each willful violation. So if there are 10 phone calls, they can stand to lose a minimum of $10,000 to the plaintiff. Judges can award more than if there's sufficient evidence of willful misconduct. 

When a creditor is calling, politely inform them of the bankruptcy and give them the file number. If they insist on contacting after being warned, start keeping a log. If it's possible, place a tape recorder on the phone. Check state laws about notification before taping, as it may make the recording inadmissible in court.

Hire a Lawyer for Help

It's best to have a lawyer for bankruptcy. The process is not an easy one, and it can trip up the unsuspecting debtor. A lawyer can handle all aspects of the case from start to finish, including dealing with a recalcitrant creditor. Be sure to ask the lawyer prior to any tape recording.