PROCEDURE BEFORE FILING
Credit Counseling
The new bankruptcy law requires that anyone who files bankruptcy must received credit counseling and financial education by approved providers as a condition for filing bankruptcy and discharging debts. Debtors cannot file bankruptcy unless they complete accredited credit counseling within 180 days of such bankruptcy filings. The credit counseling course may be completed in person, by conference call, or online. The debtor has to pay for the credit counseling course, but the costs will be regulated by the United States Bankruptcy Trustee office. The debtor will be required to provide his attorney a copy of the certificate of completion from the credit counseling agency to add to the bankruptcy petition.
Unfair Debt Collection
The Federal Fair Debt Collection Practices Act (the “Act”) prohibits unfair collection of consumer debts. If your creditors intentionally and continuously violated the Act before or after you retained a bankruptcy attorney, you may be able to recover damages. Enumerated below is a list of prohibited debt collection practices:
- Calling debtor before 8 a.m. or after 9 p.m. local time.
- Contacting debtor directly after creditor was told debtor retained a bankruptcy attorney.
- Creditor contacts employer of debtor or co-workers and informs them debtor owes them money.
- Calling debtor at work after being told not to do so.
- Intentional and continuous harassment or abuse in connection with a debt.
- Creditor employee or representative falsely representing himself as an attorney.
- Threats to debtor of arrest or imprisonment for failing to pay a debt.
- Communicating with anyone other than debtor or his/her spouse about your debt.
The debt collection laws are complicated, and a debtor’s right to recovery will depend on specific facts and evidence. You should contact a bankruptcy lawyer if you believe one of your creditors intentionally and repeatedly engaged in unfair collection practices.
Use of Credit Cards
Do not use any credit cards after 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 due to your inability to repay these debts.
Credit Union Loans
Many credit unions will cancel your checking and savings accounts if you discharge a loan or credit card debt from them. If such event occurs, you will have to open new checking and savings accounts at a different financial institution. Your credit union loan may be secured by funds in your credit union accounts, and they can seize money in these accounts to pay the loan prior to the filing of the bankruptcy petition. You should examine your loan documents or contact your credit union if you are not sure whether or not your credit union loan is secured by money in the accounts. Many credit unions also “cross-collateralize” loans, which means that a credit card account may be secured by other property such as your home or automobiles.
Get a Credit Report
You must obtain a credit report and furnish a your attorney before 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 credit denial letter.
The Automatic Stay
The automatic stay protects you from your creditors by prohibiting the commencement or continuation of judicial proceedings against you as well as all collection efforts. The automatic stay does not begin when you hire a bankruptcy attorney, but begins only after you file your bankruptcy petition.
Contact a Chapter 7 Bankruptcy Attorney at Dominguez & Associates, P.A.
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