Dealing With Creditors

Many people are subject to creditor collection and harassment prior to filing bankruptcy, and in many cases the creditors’ collection efforts are what drives people to seek bankruptcy protection. Once you decide to file Chapter 7 bankruptcy the interaction between you and your unsecured creditors will change.

Handling Creditors Before Filing. If a creditor calls you after your initial appointment and payment of your retainer, tell the creditor that you have retained an attorney to file bankruptcy and give them your bankruptcy attorney’s name and phone number.

Use of Credit Cards. Do not use any credit cards after your initial consultation with your bankruptcy attorney or once you have decided to file bankruptcy. If you have charges or cash advances in the months preceding filing bankruptcy, the creditor may file an adversary complaint alleging that you incurred recent charges with fraudulent intent and without the intent and/or ability to repay these debts. Such recent and abusive credit card debts may not be discharged in your Chapter 7 bankruptcy.

Unfair Debt Collection. The Federal Fair Debt Collection Practices Act (the “Act”) (prohibits unfair collection of consumer debts. If you can prove that your creditors intentionally and repeatedly violated the Act before or after you retained your bankruptcy attorney, you may be able to recover damages. The following is a summary of a few prohibited debt collection practices:

  1. Calling you before 8 a.m. or after 9 p.m. local time.
  2. Contacting you directly after you told the creditor you retained an attorney to represent you.
  3. Telling your employer or co-worker that you owe money to the creditor.
  4. Calling you at work after you have told them not to.
  5. Intentional and continuous harassment or abuse in connection with a debt.
  6. A creditor’s representative falsely representing that he is an attorney when in fact he is not licensed to practice law.
  7. Threatening you with arrest or imprisonment for failing to pay a debt.
  8. Communicating with anyone other than you our your spouse about your debt.

Debt collection laws are complicated, and your right to recovery will depend on your specific facts and your evidence. Contact your bankruptcy attorney if you believe you can prove one of your creditors intentionally and repeatedly engaged in unfair collection practices. A copy of the complete Act is available at under Consumer Information.

Handling Your Creditors After Filing. The Court mails the “341 Notice” to your creditors approximately one week after the petition is filed at the address you provided.

If a creditor contacts you after you have received the 341 notice, advise them that you have filed bankruptcy, give them your case number, and ask that they no longer contact you as is stated in the 341 Notice. If you receive any bills after filing, you should mail a copy of the 341 Notice to the creditor with the bill.

If a creditor continues to call you or write to you after you have advised them of your bankruptcy case number and filing date, make a record of the creditor’s contact including, if possible, the name of the person contacting you, and dates and times of contacts. You may want to keep a log of unauthorized creditor contacts after your bankruptcy filing. If you have a written log or other evidence that a particular creditor has contacted you repeatedly after notification you should call your attorney for assistance.

Get a Credit Report. You must obtain a recent credit report and furnish a copy to your bankruptcy attorney prior to filing bankruptcy. If you have recently been denied credit, you are entitled to a free credit report from the reporting agency. Instructions for obtaining this report should be on the letter you received denying credit. Also, a recent federal law gives you the right to obtain a free credit report once a year. You can obtain a free credit report from one or all of the primary credit reporting agencies at

Bankruptcy Questionnaire. The bankruptcy schedules that your attorney will prepare for you are based upon the information you provide your attorney. Your attorney will provide you a questionnaire for you to fill out so that the attorney can gather information needed to prepare a Chapter 7 bankruptcy. All information you furnish your attorney regarding your creditors must be complete and accurate. It is your responsibility to assure the accuracy of that information when you deliver the completed Questionnaire to your bankruptcy attorney. Your creditors who do not receive notice of your bankruptcy because of an incorrect address or account number might not be discharged (the elimination of the debt) and you would still owe them money.

You are required to list all creditors, including your mortgage company and auto loan or lease company. You may not pick and choose the creditors you list on your bankruptcy schedules and should include creditors who have either written off, charged off, or sold your debt to a collection agency or debt buyer. You should also provide the name and address of any creditor’s representative (attorney or collection agency).

Attorney Certification. The new bankruptcy law places additional duties on bankruptcy attorneys representing debtors in Chapter 7 bankruptcy cases. Your bankruptcy attorney must certify to the court that he or she has performed a reasonable investigation into circumstances giving rise to your bankruptcy, that your bankruptcy petition is well-grounded in fact, and the attorney has determined that your bankruptcy does not constitute an abusive filing. Also, the bankruptcy attorney must certify that, after reasonable inquiry, he or she has no knowledge that the information in your bankruptcy schedules is incorrect. These requirements increase the attorney’s duties and liability. Your bankruptcy lawyer will ask you to provide copies of your pay stubs, checking account statements, credit reports, tax returns, and other documents about your finances and assets.

Chapter 7 and Mortgage Modification. Most mortgage modifications are made under the government’s Home Affordable Modification Program (“HAMP”). The government’s HAMP Directives protect bankruptcy debtors. Chapter 7 bankruptcy does not diminish your rights to a HAMP mortgage modification. Borrowers in active Chapter 7 bankruptcy cases must be considered equally for HAMP modification upon request. Borrowers in the midst of a trial modification cannot be denied permanent modification because they file bankruptcy. Also, Chapter 7 filers do not have to reaffirm personal liability on their mortgage to be eligible for a permanent HAMP modification. You may continue efforts to modify your home mortgage after you begin the bankruptcy process

Jon Alper

About Jon Alper

Jon is an attorney focusing on bankruptcy and asset protection in Orlando, Florida.