Bankruptcy: What To Do If Your Creditor Violates an Automatic Stay

Experienced Lawyer

Even though a creditor violating an automatic stay is likely unintentional, there are consequences the company can face for the mistake. If this happened to you, we encourage people to talk with an attorney about what actions they can take against the creditor for the violation. Creditors rarely violate this automatic stay. But if it does occur, it’s usually not on purpose. However, this doesn’t mean it should go ignored by the debtor. 

Confirm the Debt is On Bankruptcy Petition

Your attorney can help you check to see whether the creditor who violated your automatic stay was listed on your original bankruptcy petition. It is the debtor’s responsibility to list all of their debts, so creditors can be notified. If you forgot to list this creditor on the petition, we can help correct this problem promptly. If you don’t update your petition, then it is still your obligation to pay this debt. 

If you did list the debt/creditor on your petition, then you can contact the creditor directly and provide them information about your bankruptcy so they know you indeed filed. When reaching out, have your bankruptcy case number, court where you filed, and the date in which you filed ready. 

If the Violations Continue to Happen

If after you contact the creditor the pestering for debt payments keeps happening, then an attorney can talk to you about how to pursue action so the creditor faces damages to such violations. As a debtor protected under an automatic stay, you can seek punitive damages and compensation for legal fees. But, in order to win this case you will have to prove that the action was willful. In regards to breaching the automatic stay, a willful violation is when a creditor is aware of the bankruptcy filing but chooses to contact the debtor anyways. 

Holding a creditor accountable for a violation may not be something every person is comfortable doing on their own. The average person doesn’t understand the court process, which is why they may reach out to an attorney for support. They can make a suggestion for next steps based on the degree of harm the creditor’s behavior had on you and whether receiving damages is likely.

Depending on the circumstances of the situation, your lawyer may suggest either:

1. Filing a motion that requests the judge enforces an “order to show cause” in which the creditor must explain their actions 
2. Filing a lawsuit against the creditor 

We understand that you may have plenty of questions about why and how a creditor may violate an automatic stay. You may be inclined to brush off the creditor’s behavior because you don’t want to make matters worse. But, you should not have to be bothered by a creditor who is blatantly disregarding your rights under an automatic stay. If a situation like this is currently happening to you or a loved one, please contact a bankruptcy lawyer in Melbourne, FL quickly for intervention. 

Thanks to the Law Offices of Arcadier, Biggie & Wood for their insight into bankruptcy law and creditors violating an automatic stay.