Will My Creditors Stop Harrassing Me If I Make Chapter 13 Payments?

Chapter 13 payments are part of the bankruptcy repayment plan individuals take on once they file for bankruptcy. At the time of filing bankruptcy, creditors stop calling. In Chapter 13 bankruptcy, the individual asks the court to reorganize his or her debt to make it easier to repay. With this tool, many can get out of financial difficulties and back on the road to financial strength. Working through Chapter 13 with an attorney's aid is often an important step in the process.

How Chapter 13 Stops Creditor Harassment

Individuals who have income and the means to repay some or all of the debt owed, but are unable to make payments as they are currently organized should consider the benefits of Chapter 13. This form of bankruptcy also protects secured assets from creditor claims. However, you are still filing bankruptcy. This means that the automatic stay goes into effect at the moment you file your bankruptcy application.

What does this mean?

• Once you file bankruptcy, all creditor actions, including judgments and harassing calls, are required, by law, to stop.
• When a creditor does contact you for the first time after filing bankruptcy, explain you have filed bankruptcy, Provide the attorney's name and your file number. The creditors are unable to contact you at this point.
• If the creditors continue to contact you throughout this bankruptcy repayment period, contact your attorney. These creditors may be in violation of Fair Credit Debt Collection Laws.
• Creditors within the bankruptcy repayment plan, and receiving funds, are unable to contact or harass the borrower in any way.

It is also important to note that in Chapter 13, most secured debts and priority debts are paid in full. However, some lenders, including most unsecured debt, will not be. In these instances, the bankruptcy court will discharge any remaining debt after the repayment period expires. This means that some of the creditors may not receive any payment at all through the Chapter 13 plan. Nevertheless, if the creditor is listed as part of the Chapter 13 filing, the creditor cannot contact you, nor request payment after the bankruptcy discharge occurs.

Hiring an Attorney

Because of the complex nature of bankruptcy, it is critical to work with an attorney. It is especially important to speak with an attorney in any situation where creditors continue to contact the bankruptcy filer. In addition, an attorney will help you to work through the bankruptcy process properly, to avoid any complications.