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Utilizing an automatic stay and identifying creditor harassment

On Behalf of | Sep 24, 2018 | Bankruptcy

The process of filing bankruptcy may bring significant emotion in your family. Though bankruptcy is a relief of debts, the decision to file is not usually made lightly. On top of your mixed emotions in determining which chapter to file and when to begin the process, you receive phone calls from badgering creditors with threats and claims that you owe more than you thought.

In New York, creditors have no authority to make false claims against you for debt owed, and you can report claims of unlicensed creditors to the Department of Consumer Affairs. Not only is it stressful to receive these phone calls, it is illegal if the claims are not valid. To protect yourself from creditor contact altogether, you may wish to begin the process of filing bankruptcy and receive an automatic stay to end all communication between you and creditors. When going through the bankruptcy process, especially if you face suspicious creditors, you want to hire an experienced attorney that can help you file an automatic stay, lead you in the direction of bankruptcy relief and help handle the illegal acts of creditors.

Illegal creditor harassment

Before you file bankruptcy, you may be receiving calls or letters claiming that you owe money to various crediting agencies. These usually consist of banks or credit card companies that you have not yet paid for their loan services.

Creditors can contact you to alert you of your owed payment. However, when the contact shifts from an alert to owed money to a threat of prosecution, you may have the right to bring a complaint against the contacting company.

New York law states that harassment is illegal when applied to those owing money to creditors. The following acts may imply that you can bring action against the creditors, and your attorney can help you determine whether a creditor’s actions are illegal. Creditors may not:

  • Claim that the organization represents someone they do not
  • Make threats of arrests or deportation
  • Explain that you have committed a punishable crime
  • Threaten to take your income or property for the owed money
  • Use violent or inappropriate language
  • Make up debt or falsely claim your debt is greater than it is
  • Call you more than twice a week before 8:00 a.m. and 9:00 p.m.
  • Contact family members or employers

Automatic stay protection

According to New York law, when you file bankruptcy, an automatic stay occurs. This stay acts as a halt on creditors’ contact with you, as the action of filing bankruptcy indicates your will to begin paying creditors. The law states that by filing, creditors may not:

  • Issue proceedings against you to collect debt
  • Obtain possession of your property as payment for owed debt
  • Establish a lien on your property or assets

The burden of receiving constant phone calls and letters takes a significant distressing toll on those facing large amounts of debt. By filing and working with an attorney to begin sorting out and creating a plan of repayment includes an end to all contact from creditors. Should an automatic stay take effect, but creditors continue to contact you, creditor organizations can face penalties.

Debt collection agencies may not illegally harass you for your owed debts. You have the right to privacy and security, so you and your attorney will determine if legal action is necessary against the creditors. Even if creditors’ actions prove legal under New York law, you have the ability to halt the communication by beginning the bankruptcy process, which enacts an automatic stay.