4 Steps To Handling Automatic Stay Violations During Chapter 13 Bankruptcy

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While going through the process of paying down debts controlled by your chapter 13 bankruptcy proceedings, all associated creditors must cease collection actions. The order for an automatic stay, as given by the court, prohibits collection phone calls and letters, service disconnection and eviction. Creditors cannot attempt to collect through wage garnishment or seizure of your assets.

Instead, creditors must wait for you to fulfill the court ordered payment plan to receive their funds. Once you default, however, all bets are off and creditors may resume collection activities like normal. If you receive any collection notices or calls while under the protection of the automatic stay order, you need to promptly address the creditor using the following steps.

Step 1: Find Pertinent Bankruptcy Information

You will need to gather information, including your case number and filing date, to verify the bankruptcy proceedings with the creditor. Although all named creditors on the bankruptcy were issued notification, the associated forms may be misplaced or discarded accidentally. Double check your information accuracy, as any discrepancies can give creditors leeway with the courts if you end up needing to file a lawsuit.

Step 2: Copy All Court Notices

With your bankruptcy ruling, you may have received a letter from the judge detailing the payment plan and requirements associated with your case. You will need to provide the creditor in question with a copy of that letter to confirm the automatic stay ruling is in effect. Make sure the letter includes the issue and end dates in full. Mark your name, case number and current date on the top of the copy you plan to send out. Make sure to send out the copies and your notification letter within a day or two of preparing the documents.

Step 3: Write A Detailed Notification Letter

The certified letter needs to officially notify the creditor about the chapter 13 bankruptcy ruling and automatic stay order. The letter should include your full name, creditor assigned account number, bankruptcy case number and current date.

Use a professional tone throughout the entire letter. The notification should calmly and clearly notify or remind the creditor that your property and funds remain protected under court order, especially when facing garnishment or property seizure attempts. Make three copies of this letter; one for your files, one to send to your lawyer and another for the creditor.

Step 4: Send Documents To Creditors In Violation

Send the lawyer and creditor's copies separately by certified mail on the same day. Indicate that you would like to receive return receipts to have signed proof of acceptance on a specific day. Make several copies of the return receipts for your lawyer and personal files. You can also scan the receipts into your computer in case you misplace the physical copy.

If the creditors continue any other collection actions after that date, you may be able to sue for damages. Furthermore, any evictions or collection of your property may be reversed by the court if you have proof of prior notification. As creditors move to a different collection company, you may receive additional collection letters or calls. If this happens, notify your lawyer immediately to handle the situation through the court system.  

Contact Your Bankruptcy Attorney

If the creditors in violation of the automatic stay order do not immediately cease and desist upon receiving proper notice, your lawyer may need to file a lawsuit with the assigned court. Depending on the creditor's actions, the courts may order that party to pay legal fees and other damages. Your lawyer must prove the creditor continued collection actions after receiving your notices. Therefore, it is vital that you always keep all certified mail receipts and maintain good records regarding creditor phone calls and letters while going through chapter 13 bankruptcy. Click here for info about finding a bankruptcy attorney.