Lefkovitz & Lefkovitz

Nashville Office 615-256-8300       Cookeville Office 931-400-2218

Nashville Office 615-256-8300
Cookeville Office 931-400-2218

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When creditors don’t abide by the terms of a stay

On Behalf of | Jul 19, 2018 | Chapter 13 |

When a person in Tennessee or any other state files for bankruptcy, he or she is usually granted an automatic stay of creditor actions. However, this stay can be violated if a creditor didn’t know about the bankruptcy or wasn’t aware of the law. In the event that the creditor knew about the bankruptcy, any violation of the stay could be considered willful.

Ignorance of the law generally doesn’t apply as creditors are notified of their responsibilities when they find out about a debtor filing for bankruptcy. Typically, large companies have ways of learning about a bankruptcy case as soon as it happens. More often than not, violations are committed by smaller creditors or family members who may have lent a person money. In some cases, citing the law is enough to get unauthorized contact to cease until the stay is lifted.

Prior to taking legal action, it is important to confirm that the creditor knew about the stay. It is also important to make sure that the stay has gone into effect or is still in effect. In some cases, the stay will be lifted before debts are discharged. If a person has multiple cases pending at the same time, a stay may only last for 30 days or not go into effect at all without asking the court to impose it.

Those who are looking for debt relief may find it by filing for bankruptcy. One of the key benefits that a person may receive is a stay from creditor contact and collection activities. The stay generally applies to all creditors whether they are national banks or a friend who let an individual borrow money. If a willful violation occurs, an individual may be entitled to compensation.

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