According to the U.S. Bankruptcy Code, the automatic stay continues until either the court lifts it (pursuant to a creditor request) or the final discharge order has been entered by the court. Any attempt to collect a debt before one of those events takes place will be a violation of federal law.
It’s important to understand, though, that the violation of the automatic stay may be either intentional or negligent. For example, a creditor may have sent a mailing before the filing of a bankruptcy petition that is not received until after the automatic stay goes into effect. Additionally, a creditor may receive notice of the bankruptcy by mail, but not process it until after attempts have been made to collect on a debt. As a general rule, the sanctions against a creditor for violation of the automatic stay require that the creditor act with knowledge and intent. If that happens, the creditor may be required to pay damages to the debtor, including the potential for costs and attorney fees. The court may also assess punitive damages, though such an outcome is rare.
You cannot rely on the bankruptcy court or the bankruptcy trustee to take the initial steps to protect your rights after a violation of the automatic stay. You must go directly to the bankruptcy court, providing evidence of the violation, and asking for sanctions against the creditor.
At the Law Office of Howard N. Sobel, P.A., we provide personal bankruptcy counsel to men and women throughout the state of New Jersey. Contact our office online or call us at 856-424-6400 to set up a free initial consultation. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.
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