Q

Will a chapter 7 bankruptcy stop my creditors from calling?

A

Yes. Section 362(a) of the Bankruptcy Code (the automatic stay provision) prevents creditors from taking any action to collect debts. The automatic stay also prevents secured creditors from foreclosing, seizing, and repossessing their collateral. Once a creditor learns of any bankruptcy filing, that creditor must immediately stop all collection efforts.

Creditors receive notice of the bankruptcy shortly after the petition date based upon the addresses you provided in your schedules. Should a creditor call you after the case is filed, simply advise them of the bankruptcy filing and provide them with the case number and the petition date. Sometimes, you cannot just sit back and wait. A more proactive approach will be required. In those situations you or your attorney should contact the creditor immediately after filing the bankruptcy petition. Examples requiring immediate notification include: (1) pending litigation, (2) possible repossession, or (3) possible foreclosure.