Debtors in Virginia who have filed for bankruptcy are immediately under an automatic stay from being pursued or harassed by creditors. If the actions of a creditor are in violation of the automatic stay, the debtor may have legal recourse.
It is not uncommon for violations of automatic stays to be the result of ignorance of the law or issues with timing. However, there may also be situations in which creditors knowingly violate the stay in order to bypass the bankruptcy code.
It may take a week or more for creditors to be notified that a debtor has filed for bankruptcy. Creditors who have registered their emails with the court may receive notification almost immediately if the system matches the creditors with those that are recorded in the bankruptcy case. Large creditors may be subscribed to services that collect bankruptcy case data and offer it to the creditors for comparisons with the information in their databases. In other cases, creditors may only hear of the bankruptcy case when a notice is received from the court or when debtors notify the creditors themselves.
During the time between a bankruptcy case has been filed and the creditor has been notified of the case, debtors are likely to continue to receive correspondence and phone calls from creditors demanding payment. Even though these actions may be unlawful, the creditors may be able to claim ignorance of the filed bankruptcy case.
A bankruptcy attorney may evaluate clients’ financial situations, including their income and debts, and advise whether they may qualify for Chapter 13 bankruptcy to obtain debt relief and stop creditor harassment. The attorney may be able to assist with creating an affordable payment plan. The attorney may also pursue damages against creditors who violate the automatic stay after a client has filed for bankruptcy.