You made the decision to deal with your debts. You met with a trustee, filed bankruptcy and have a plan to get your fresh start. So why are you still receiving calls from collection agents telling you to pay up?
You’re sure you gave all the information to your trustee but you just got a notice in the mail that one of your creditors is going to take you to court if you don’t start paying. Or suddenly, after being quiet for so long, the phone has started ringing.
Don’t panic! It could be that your creditors simply do not know about your bankruptcy and there is an easy solution.
Bankruptcy Is An Automatic Stay of Proceeding
When you file for bankruptcy, the stay in a bankruptcy is the legal process that stops creditor actions. This stay is effective the day you file bankruptcy. This means that creditors do not have the legal right to continue the collection process. So why are they still trying to collect money?
Part of the process of filing for bankruptcy is for your trustee to forward copies of your bankruptcy documents to all creditors listed in your statement of affairs. The process of creditors updating their information however can take time.
Many creditors have large collection centres, or hire someone to collect their debt, or they may have sold your debt to another collector . They are trying to collect on that debt and may not know or have noticed that you have filed bankruptcy. It could be that they may have just received your information (if the debt was sold) and it was not up-to-date. They may even think if they just “bother” you enough you might still pay them.
You may have accidentally missed mentioning a creditor to your trustee during the preparation of your documents so they don’t even know you filed a bankruptcy or proposal. That’s OK, honest omissions can be resolved by contacting your trustee and having them forward your documents to this new creditor.
What To Say To Your Creditors
If a collection agent calls you, don’t be afraid to talk to them. Here is what you should say:
- Advise them that you have filed bankruptcy or a consumer proposal.
- Notify them of the date that you filed, your estate number if you have it and the name of your Trustee in Bankruptcy.
- Ask them to contact that trustee to confirm the information. Sometimes a creditor will ask you to contact the trustee and have the trustee call them. No problem, at Hoyes Michalos we are happy to contact creditors on behalf of our clients if they continue to receive collection calls. Simple ask for their name and phone number and give that information to your trustee.
If you are getting mail regarding your debt, send that to your trustee so that they can contact the company to remind them of your bankruptcy and provide them with any documents that they may need.
The hard part is deciding to file bankruptcy to deal with you debt. Once your bankruptcy is filed, as long as you complete all of your bankruptcy duties, you are on your way to getting your fresh start. Don’t stress if a collector calls. Let them know you’ve filed. Once all your creditors, and their agents, are up to date with the situation that should stop the calls. If it doesn’t contact your trustee for help. It’s that simple.
If you need the benefit of creditor protection provided through the Bankruptcy & Insolvency Act, only a Licensed Insolvency Trustee can help. We can stop wage garnishments and collection calls. Contact Hoyes Michalos today for a free, no-obligation consultation so we can give you a plan to deal with your debts.