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Creditor Harassment Before and After Bankruptcy

Posted by Ryan Singleton | Apr 08, 2022

It is common for people to experience a variety of collection methods from creditors prior to filing a bankruptcy.  Most of the time, the collection methods are employed lawfully.  But when creditors cross the line and commit a creditor harassment violation, it can have a potential impact on a person's bankruptcy case. 

In every case, the Bankruptcy Court will examine whether an individual is required to pay anything back to creditors based upon his or her assets, among other things.  Everyone is entitled to certain protections on their assets found under either state or federal law, which are known as exemptions. 

Having the right to sue someone for any reason, including for creditor harassment that occurred prior to filing the case, is considered to be an asset in a bankruptcy case.  If a person has enough exemptions available, they can exempt their potential creditor harassment case, which means that they would be able to keep any funds they may eventually recover from the creditor. 

If someone does not have enough exemptions available in a Chapter 7 case, then creditor harassment case would be turned over to Trustee who could use the debtor's attorney if they already hired one, or the Trustee could hire their own attorney.  Either way, any funds recovered in the creditor harassment lawsuit, would then be distributed amongst all of the creditor who file claims in the bankruptcy estate.

Anytime assets are distributed in a Chapter 7 case, it will make the case last longer.  A normal Chapter 7 will last 3-4 months from the date it is filed to the date it is closed.  Meanwhile, asset cases will usually last about a year and in some cases can go on for multiple years.     

If creditors continue to attempt collection after a bankruptcy is filed, that could be considered creditor harassment as well.  In Chapter 7 cases where the right to sue occurs after the bankruptcy is filed, the debtor would not be required to claim it as an asset in their bankruptcy case.  The debtor would be free to pursue, recover, and keep any damages from the lawsuit. 

However, whether a person experiences creditor harassment before or after filing a Chapter 13, they must disclose the potential lawsuit in their bankruptcy schedules so long as their Chapter 13 case is open and pending.  Depending on the case, a certain portion of damages may be required to be turned over to the Chapter 13 Trustee in addition to the monthly Chapter 13 payments. 

If you believe you have experienced any form of harassment from your creditors or are considering filing for bankruptcy, do not hesitate to contact the Holland Law Group to hire an experienced Florida attorney. We have attorneys throughout the state that can assist you whether you're in Miami-Dade, Hillsborough, Duval, Orlando, Sarasota, or any other area in Florida. Call (941)-306-3601 for your consultation today!

About the Author

Ryan Singleton

Ryan Singleton is a native of Portsmouth, RI but he is a long-time resident of St. Petersburg.  He attended Eckerd College from  and he graduated law school from Stetson University College of Law in 2005.  After 2 years of general practice, Ryan started managing a high-volume of bankruptcy cases ...

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