Automatic Stay Law

[tammark]

I have talked with the attorney and we have a question. The automatic stay laws state that once a bk is confirmed that the creditor must cease and desist (hope I am spelling it right) all collection attempts or activity. The clause seems to be outdated because it does not speak of the different types of collection attempts.

I think there are 4 collection activities
1. Demand Letter
2. Telephone collection calls
3 Lawsuits for the debt
4. Credit reporting which is an attempt to collect a debt

I have clients that the creditors have continued to report and update every month after the bk is filed and confirmed. Let's say the bk was filed in 8/2002. I know it is okay for the creditor to report that the account is in bk for that month. In a discussion with other law professional, we were not sure if the creditors could continue to update their reporting for every month there after. Our assumption was that since the bk court only reports to the credit burueu twice (when you file and when you either discharge or dismiss) that this is a reorganization that allows you to repay your debts. If this is the case reporting every month destroys that change. When you report every month, It brings the score down from 2-5 points every month that a negative entry is on the credit.

I was in a dispute meeting between 2 attorneys. Once for the client and one for the lender. One of the things I told the client was to ask for compensation for voliating the automatic stay on the credit report. The attorney stated that the lender had not voliated the automatic stay be reporting every month, but in a settlement agreement (attorney did not want to go before the judge) gave her a compensation of $3,000. She was orginally asking for a penalty of 10 dollars a day which was a total of $8,000 for a 2.5 year reporting period.

Is this truly an voliation fo the automatic stay laws.


Thanks

[robivi3]

Excellent Post

This is very enlightening. Good post, someone please answer

[HRx]

Hi Tammark,

I'm not sure if I thoroughly understand the post you made. But let me say this, once an individual's BK7 has been discharged, they should obtain a copy of thier credit report from all three CRA's about 60-90 days after recieving thier discharge papers.

They need to ensure that all thier bad accounts, are listed as BK7 with ZERO balance owed. Once, an account has been discharged under BK7 the creditors should not be submitting negative remarks to the CRA's. (but it does happens) If a creditos persits in submitting negative remarks to the CRA's one would need to mail a certified letter and thier discharge paperwork to both the creditors and all three CRA's. If the creditors continue to report negative remarks to the CRA's. If this method fails, then notify the FTC of this matter, and consult with an attorney to determine whether suing the creditors is an viable option for you.

Good Luck!

[tammark]

I stating that when you are in a chapter 13, a creditor has to stop reporting every month that you are in bk. They are only allowed to report once when you file. The court only reports once. They are not allowed to continuely update your credit report to state that you are in bk. Chap 13 is an reorganization plan. Just like some of the companies that will get you in a debt consolidation plan and cut interest and stop late fees from being added to your account. In exchange the credit company can no longer report you as late as long as you are in the debt consolidation plan and make the payments. It is clearly state in the contract. The are allowed to report once that you are in a consolidation plan. Chap 13 is a goverment consolidation plan and it is stated that the creditor voliates automatic stay laws because credit reporting is one of ways that you can collect a debt.

[tammark]

Hi Tammark,

I'm not sure if I thoroughly understand the post you made. But let me say this, once an individual's BK7 has been discharged, they should obtain a copy of thier credit report from all three CRA's about 60-90 days after recieving thier discharge papers.

They need to ensure that all thier bad accounts, are listed as BK7 with ZERO balance owed. Once, an account has been discharged under BK7 the creditors should not be submitting negative remarks to the CRA's. (but it does happens) If a creditos persits in submitting negative remarks to the CRA's one would need to mail a certified letter and thier discharge paperwork to both the creditors and all three CRA's. If the creditors continue to report negative remarks to the CRA's. If this method fails, then notify the FTC of this matter, and consult with an attorney to determine whether suing the creditors is an viable option for you.

Good Luck!

Reply


I am stating the the attorney states that the Chapter 13 bk Section 362 Automatic Stay bk law is an injunction that prohibits creditors on the continuation of a civil action or any act to collect any consumber debt from any individual liable on the debt with the debtor or from any individual who secured the debt. Unless the creditor receives a release of the automatic stay, this injunction continues until the case is closed or converted.

Most creditors think because it does not list credit reporting (per say) like it lists calling, sending letters or repossessing property that it is exempt from the automatic stay and they can continue to update the credit report. We all know that credit reporting is another way of attempting to collect a debt. Do you know that each month they update after the bk is filed that it can drop your scores from 2- 4 points and keep your scores from increasing. The bankruptcy court does not have to keep updating their bankruptcy filing on you credit report. It is placed once, the month you file. Since we know the this is a debt consolidation plan (Federal) they are allowed to list the lien in bk once during the month of filing, but any further updates of the credit is a violation of the injunction. I can pdf the automatic stay section 362 that the attorney sent me with the highlighted areas that refer to the injunction prohibiting collecting on a debt.

Thanks




tammark

[no_it_all]

< big snip> We all know that credit reporting is another way of attempting to collect a debt. tammark

Huh?? Please explain...

[tammark]

I not an attorney either, but the attorney who specializes in Consumer Law Group states this. Just wondering if any one has run across this situation.