What Is Bankruptcy Protection?
Bankruptcy protection is a term that is used to describe what is called a "stay" on your assets and property during bankruptcy proceedings. This means that your assets are under bankruptcy protection and cannot be foreclosed, repossessed, or removed from you without the courts permission. Because all property that is a part of the bankruptcy is under the courts protection, it is classified as bankruptcy protection.
Because of bankruptcy protection creditors are barred from contacting you, and trying to continue collection efforts for all accounts that have been submitted to the bankruptcy proceedings. This provides the basis for the protection, which saves you from unnecessary harassment from creditors who tend to use harassive measures to ensure that their client is paid.
If you suspect that someone is violating the bankruptcy protection for your case, then you should notify your lawyer and have them file a complaint against the creditor. While some creditors ignore bankruptcy protection, most creditors are good about following the letter and the spirit of the law. Each person has the responsibility of ensuring that any creditor who breaks the protection is reported to the courts to be handled as the courts see fit.
While each case has individual circumstances, the only way a creditor is allowed to contact a person in bankruptcy is if they have the permission of the courts themselves. They are not allowed direct contact otherwise, as it is a breach of the bankruptcy protection. It is important to note though, just because someone is in bankruptcy does not mean that that they are protected from all creditors. This means that if a creditor is not listed in the bankruptcy, and their debt that you owe is not listed then they are still allowed to contact you. For example, if you owe ABC Reality $100,000, and when you file bankruptcy, you do not list this as a debt, then ABC Reality is still allowed to contact you in an attempt to collect the debt. However, if later on you are able to add the debt, once it is added they are no longer allowed to contact you. As you can imagine the rules surrounding bankruptcy protection are very strict and leave very little room for interpretation. Instead of allowing room for interpretation, there are specific rules and guidelines that must be followed to ensure that all creditors and consumers are treated fairly. While some people think that the rules surrounding bankruptcy protection are too strict, they are designed to protect the consumer more than they are ever designed to protect the creditors. Bankruptcy protection is a good example of why a good and experienced bankruptcy lawyer is an absolute necessity in order to have the best overall experience as possible. As your bankruptcy progresses, you will notice that fewer creditors attempt to continue contacting you. However, if you fail to report creditors who break the rules by continuing collection methods and still attempt direct contact then they will not stop. Always use the bankruptcy protection to your benefit.
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