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you. Upon the filing of your Petition in Bankruptcy, the theory is that all collection efforts must immediately cease. This is one of the principle benefits of a Bankruptcy Case; it is referenced as the “automatic stay”. However, this situation is becoming somewhat more complicated with the new legislation known as the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" (we affectionately refer to it as: the “Bankruptcy Prevention and Consumer Abuse Act of 2005"). Under the new Bankruptcy Legislation, if your Bankruptcy case is the first one you have filed, or you have not filed a previous bankruptcy in over a year, then the collection efforts by your Creditors will still be required to cease immediately. But, if you have filed more than the present Bankruptcy Case within a year, this protection may be limited or not available at all until you petition the Court to impose such a protection. It is unknown at present what factors will be required by the Court to grant this basic protection from your Creditors if you have previously filed another Bankruptcy Petition.
It should however be noted that Creditors are notified of your Bankruptcy Petition by the U.S. Bankruptcy Court noticing center which is located on the East coast of the United States. Often it may take between 7 to 10 days for the Court to dispatch the notices to the various Creditors, so there may be some lag time between your filing the case and the time you stop receiving correspondence from the Creditors. But, in the case of telephone calls, you can either verbally notify the Creditors of your commencement of a Bankruptcy Petition, or you can simply refer them to our office once you have filed. For this reason, it is always best for you to contact our office a few days after you have signed your Bankruptcy documents so you can obtain the Case Number that has been assigned by the Court to provide to your Creditors in the event that they contact you prior to receiving formal notification from the Court.
It is always best for you to keep a notebook close to your telephone, so you can make a notes of the date, time, and representatives name for the Creditor that you provide verbal notification of your Bankruptcy Case. If any further efforts occur from that Creditor, the Court will take appropriate measures to assure the Creditor does not violate your Bankruptcy rights by continuing collection efforts once they have notification of the Bankruptcy.
Furthermore, if you have a Court date that has been scheduled prior to the filing of the Bankruptcy Petition, you should plan on attending the Court date to provide the Court with your Bankruptcy Case number. Frequently Court Clerks (and some State Court Judges) are not familiar with the protection that is afforded by starting a Bankruptcy Case. Likewise, notices that are dispatched from the Bankruptcy Court do not reference the State Court Case number, so oft- times the State Court does not claim to have adequate notice of the Bankruptcy by the time that was originally set as the Court date. But, once you appear at the Court hearing and give them notice of the Bankruptcy Case, the Court simply does not proceed because they then have actual notice of the pending Bankruptcy case. At that point, the opposing side should also hesitate to proceed because they are also aware of your Bankruptcy case, and they do not want to be sanctioned by the Bankruptcy Court by continuing to collect from you after they are aware of the Bankruptcy.
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