When Must Creditors Stop Hassling Me?

The day you file the petition, the automatic stay (in the bankruptcy code) requires creditors to stop their collection activities.  Garnishments and levies must stop immediately.

Certain collection activities are still permitted, however, in certain limited instances:

Criminal prosecution.

Domestic support actions by an ex-spouse or the state (even against exempt property).

Setoff.  If you have deposits with a creditor such as a bank, the creditor can "setoff” what it owes you (like your deposits) against what you owe it. Therefore, if you owe your bank or credit union money it is best to have as little as possible in the account on the date you file.

Loans against retirement. Withholding from the debtor’s wages and collection of loan amounts due as a result of the debtor’s borrowing from employer sponsored pension, profit sharing, stock bonus, or other plans recognized by the IRS as tax exempt.

For more information: taxhelp@taxdefendant.com

425-259-9363