One of the primary reasons individuals, couples, and businesses file for bankruptcy is to receive protection from their creditors. Upon filing bankruptcy all creditors must stop every form of collection- whether it be foreclosure, repossession of property, wage garnishments, and even letters and telephone calls. Federal law prohibits creditors from taking any action to collect from you once the bankruptcy has been filed. This protection is referred to as the “automatic stay” in bankruptcy.
The Dallas Morning News is reporting that a bankruptcy judge in Texas recently chastised Ally Financial, the nation’s top vehicle loan company, for consistently and willfully violating the automatic stay provisions of the bankruptcy code. The article reports that “U.S. Bankruptcy Judge Stacey G.C. Jernigan writes in plain language that she believes Ally Financial Inc., the nation’s top auto finance company, violated federal bankruptcy rules designed to protect debtors. She accuses the lender of improperly harassing debtors who’ve filed bankruptcy to get them to pay off a debt they no longer owe. After seeing evidence and hearing testimony, she concludes that Ally routinely sent form letters designed to confuse debtors in the hope of picking up extra monthly payments.”
Judge Jernigan then awarded the debtor $11,000 in damages from Ally Financial for sending out these confusing letters. Bankruptcy judges take seriously the protection that bankruptcy provides for debtors and enforce this protection through sanctions. Occasionally, a judge will impose treble damages, which tripes the amount of damages actually suffered by a debtor.
Bankruptcy can provide protection from your creditors, and it is nice to see that judges are enforcing this protection. If you are the victim of aggressive collection activities, contact us today so that we can help you obtain the protection of federal bankruptcy law.