Payday lenders keep calling me after filing bankruptcy. What do I do? – Alabama Bankruptcy Attorney Judson E Crump

We’ve all seen the TV commercials:

“Stop foreclosures, wage garnishments, and repossessions NOW!  Call Alabama Bankruptcy Attorney Passem Tuaparalegal TODAY!”

And if you’ve filed bankruptcy, the primary reason you did so was to stop all of your creditors from calling you, taking your paycheck, taking your house, and doing all the annoying stuff that creditors do when they want your money.  What you paid for was this thing called the Automatic Stay.

The Automatic Stay.

Section 362(a) of the Bankruptcy Code says that the filing of a bankruptcy petition “acts as a stay, applicable to all entities of —

(6)any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title;”

It means exactly what it says.  Your bankruptcy petition stops all collection attempts.  ALL COLLECTION ATTEMPTS.

But as we well know, just because a law exists does not mean that everyone follows it.  Sometimes, creditors keep calling and pestering you anyway.  Why?  They don’t think you’re going to do anything about it.  They think that they’re immune to the bankruptcy because you didn’t tell them about it before you filed.  They may think that they can keep going after you as long as you have some property that you pledged them as collateral for the loan.  Sometimes they just don’t care.

So what do you do?

You sue the bastards.

Section 362(k) – probably my favorite part of the Bankruptcy Code – says that if a creditor willfully violates the automatic stay, you can sue them for whatever damages it causes, plus punitive damages and attorneys’ fees.  That’s great news.  Willfully, according to the U.S. Supreme Court in Safeco v. Burr (2006), includes any action taken “in reckless disregard” for the law.  What does that mean?  If they know about your bankruptcy and continue to try and collect anyway, it’s willful.

Here’s an example.  A payday lender keeps pestering you.  Calling you at home, calling you at work, threatening to call your references, threatening to show up at your job and embarrass you in front of your co-workers and friends and family.  So you file bankruptcy.  The next time the jerk calls, you say “I’ve filed bankruptcy and my attorney is Judson Crump.  His number is 251.272.9148.  Don’t call me again.”

And the payday lender employee just laughs in your face and keeps asking you for money.  You hang up.  They call again.  They have violated the automatic stay.  Willfully.  You can drag them into court to answer for that.  If the court finds that they’ve broken the law, they have to pay you and your attorney for whatever damage it causes: including emotional distress damages.

Some bankruptcy specialists really only specialize in the routine aspects of filing and managing bankruptcy cases, and don’t have the staff or the time for litigation against creditors.  When my clients inform me that a creditor with definite knowledge of the bankruptcy has continued to call or otherwise seek to collect, I file suit immediately.  There is no need for a warning shot or a cease and desist letter.  Those are for creditors that accidentally sent a letter or billing statement before they knew about the bankruptcy.

If you call your lawyer to report a creditor that keeps calling you after learning of the bankruptcy, and doesn’t want to take any action against the creditor or collector, you can hire another lawyer to represent you just for the stay violation case.  I’ve handled several stay violation cases and enjoy them.  If you are looking for an attorney in Alabama to take action against an auto dealer, payday lender, collection agency, or other creditor who is violating your rights in bankruptcy, call me at 251.272.9148 today.