DOES the filing a Chapter 7 petition stop creditor telephone calls and letters?
Immediately after a Chapter 7 bankruptcy petition is filed, the Court notifies creditors listed on the petition of the debtor’s bankruptcy, and upon receipt of this notice by creditors, an “automatic stay” takes effect pursuant to 11 U.S.C. 362. The stay prevents creditors listed in the petition from taking further steps to collect debt, without first getting permission from the bankruptcy court. Prohibited conduct includes making phone calls, sending collection letters, filing a lawsuit, pursuing a lawsuit in progress, repossessing property, garnishing wages, attaching bank accounts, evicting tenants, and foreclosing on real property. The automatic stay lasts until the bankruptcy process is completed, unless the creditor files a motion asking the court to lift the stay, and only if that motion is granted by the Court. When the debtor is discharged in bankruptcy court, ALL LISTED UNSECURED DEBTS, THAT HAVE NOT BEEN EXCLUDED, ARE DISCHARGED.
