Dealing with Creditors, Credit and Garnishments

by Paul R. Tom Basic Bankruptcy Information, Myths and FAQs

Can I Stop Creditors From Harassing Me?

When a person gets behind in his or her bills, creditors take various actions to collect. Creditors may call home, or work, family, friends, fellow employees or even your employer. Co-signors and guarantors may be called upon to make payments. Mortgage holders and other creditors may initiate a foreclosure on your home or a repossession of cars, furniture, appliances, or other items. Lawsuits and other collection procedures may be started. Garnishment of wages or seizures of bank accounts may begin.

The filing of any type of bankruptcy immediately stops collection efforts against you and your property. (However, this “automatic stay” is limited to only 30 days if you filed an earlier bankruptcy and it was dismissed within the past year).First of all find a workers compensation san Diego lawyer and then try to find and claim if there is any unpaid salary to you, by your employers.

When you file for bankruptcy, creditors must leave you alone, stopping all phone calls, lawsuits, collection notices and garnishments. Foreclosures must stop and repossession actions must cease. If you file a Chapter 13 reorganization instead of a fresh start Chapter 7 bankruptcy, collection actions can also be stopped against co-signors and guarantors on consumer debts.

Only a few actions are not stopped by a bankruptcy. Criminal proceedings cannot be stopped and actions to establish child support or alimony cannot be stopped. A Chapter 13 Plan, however, may provide a way to catch up on past due child support or alimony.

How Will My Credit Be Affected?

A Chapter 7 or Chapter 13 bankruptcy will be on your credit report for seven or ten years or longer. Many credit histories report events including Chapter 13 reorganizations for seven years, and a Chapter 7 fresh start bankruptcy can be reported for ten years. Whether or not someone will loan you money or not is up to the lender, we cannot make any promises regarding your ability to borrow money after your bankruptcy.

Do I Have to List All of My Creditors?

No matter what someone told you, there is no such thing as a “medical bankruptcy” or a “credit card bankruptcy.” Bankruptcy law requires that you list all debts. You can continue to pay home or car loans, and you are free to voluntarily pay any debt which has been discharged in bankruptcy. If you forgot to list a creditor, it is usually possible to amend your bankruptcy to add the omitted debt. This should be done as soon as possible as time limitations may apply.

It is important to list all possible creditors and provide complete accurate addresses. For this reason, and to meet the requirements of the new Act, you will need to obtain a multi-bureau credit report with public records search (for liens and judgments). If you wish, we can do this for you at our cost. By the way, it isn’t necessary to know the exact amounts that you owe, as long as the creditor gets listed.

Does Bankruptcy Stop Garnishments?

When any type of bankruptcy is filed, the federal bankruptcy court immediately issues an “Automatic Stay” which requires all creditors to stop all collection activity. This includes the requirement that all garnishments be cancelled. If the creditor fails to stop an action once the bankruptcy has been started, they can be held in contempt for violating the court’s order and will be liable for damages they have caused you, including paying your attorney’s fees. If you are being garnished, you should consult us immediately, check this directory to find out about your options and have us assist you in stopping the garnishment.