Once our Southern California Bankruptcy Law firm is retained, CREDITORS MUST REFRAIN ALL FURTHER CONTACT from you. That means all phone calls, letters, harassment, third party communications, etc., must end immediately. If a creditor contacts you after representation begins and proof exists they know of our representation, we can sue.
Your creditors will receive a letter advising them of our representation and to cease all further communications. Should they choose to break the law, you then have the option to reverse the situation and commence litigation. We have successfully sued numerous creditors over the years for this type of conduct with substantial recoveries. In many cases, it pays for the bankruptcy and puts money in your pocket.
Following is a sample of some of the laws we use in protecting you from your creditors and in litigating against them for their wrongful conduct.
“Accordingly, you are hereby legally put on written notice that you must cease and desist all future communications with the above referenced Debtors(s) except statements of account and/or verification of debt in accordance with California Civil Code Section 1788.14(c) and 15 U.S.C. Section 1692(c).”
“YOU ARE ALSO PUT ON NOTICE THAT THE ABOVE REFERENCED DEBTOR DISPUTES THE VALIDITY OF THE DEBT. PLEASE OBTAIN VERIFICATION OF THE DEBT AND SEND THE SAME TO BOTH THE CONSUMER AND THIS OFFICE PRIOR TO ANY FURTHER COLLECTION EFFORTS, pursuant to 15 U.S.C. 1629(g). ADDITIONALLY, YOU CAN NOT SPEAK WITH THE DEBTOR AND MUST COMMUNICATE THROUGH THIS OFFICE FROM THIS POINT FORWARD, pursuant to, 15 USC 1601] 805(2)(b)(3); and Article 2 of California Civil Code Section 1788.10, et al.”
The following California Civil Code Section 1788.14(c) is reproduced for your convenience:
“No debt collector shall collect or attempt to collect a consumer debt by means of the following practices: ….(c) Initiating communications, other than statements of account, with the debtor with regard to the consumer debt, when the debt collector has been previously notified in writing by the debtor’s attorney that the debtor is represented by such attorney with respect to the consumer debt and such notice includes the attorney’s name and address and a request by such attorney that all communications regarding the consumer debt be addressed to such attorney, unless the attorney fails to answer correspondence, return telephone calls, or discuss the obligation in question.”
“Please direct all future inquiries from this point forward to (760) 450-3333. Creditor calls will be taken only from the hours of 10:00 a.m. to 4:00 p.m. PST on Tuesdays and Thursdays. We suggest you contact our office every thirty (30) days for case status. The Bankruptcy Court will notify you in writing of the case number, date of filing, and 341(a) Meeting of Creditors information once the case is filed.”
“YOU ARE HEREBY PUT ON NOTICE THAT FAILURE TO ABIDE BY THE ABOVE REFERENCED LAWS MAY RESULT IN A LAWSUIT BEING FILED AGAINST YOU FOR STATUTORY DAMAGES, ACTUAL DAMAGES, PUNITIVE DAMAGES, ATTORNEY’S FEES, AND COSTS.”
Then, when the bankruptcy is filed, additional laws go into effect, the most powerful of which is the Automatic Stay.
THE AUTOMATIC STAY
The filing of a consumer bankruptcy case, Chapter 7 or Chapter 13, instantly triggers one of the most powerful injunctions available, the Automatic Stay. This injunction, provided by 11 U.S.C. 362, prohibits the continuance of any action by any creditor against the debtor or the debtor’s property. In Chapter 13, the stay even protects co-debtors who are liable with the debtor on consumer debts. The automatic stay gives the debtor protection from his creditors, subject to the oversight of the bankruptcy judge, and brings all of the debtor’s assets and creditors into the same forum, the bankruptcy court, where the rights of all concerned can be balanced.
The automatic stay prohibits, among other things:
- Beginning or continuing law suits
- Collection Calls
- Creditor Harassment
- Foreclosure Sales
- Garnishments and Levies
- Duration of Stay
The automatic stay remains in effect until:
- a judge lifts the stay upon granting the request of a creditor after a hearing;
- the debtor gets a discharge; or
- the item of property is no longer property of the estate.
- Stay permanent upon discharge
When the debtor gets a discharge, the automatic stay is replaced by a permanent injunction prohibiting creditors from all of those actions with respect to discharged pre-petition debts that the automatic stay prohibited.
Outside the stay
The automatic stay does not stop the following:
- Criminal proceedings.
- Actions for a family support order or the modification of such order.
- Actions to collect support from property that is not property of the estate.
- Tax audit, demand for tax returns or assessment of tax (collection of tax is still stayed: the tax authorities, to their chagrin, are subject to the stay, just like other creditors).
Anyone who willfully violates the stay in the case of an individual is liable for actual damages caused by the violation and sometimes for punitive damages. Some courts confine the right to damages to individual debtors and deny damages for stay violations as to corporate debtors.
Since the court usually takes several days to several weeks to mail creditors notice of the bankruptcy, it is incumbent on the debtor or debtor’s counsel to give actual notice to creditors who might take action without knowledge of the stay.
Creditor actions taken after the stay is in place are generally void or voidable: that is, any action the creditor takes in violation of the stay has no legal effect.
Click here for our Ninth Circuit Case which created new law under the Automatic Stay “duty to undo.” In this case, In re Leetien 309 F3d 1210, the creditor ended up paying significant money since they simply failed to abide by our request to dismiss a lawsuit within three weeks.
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