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.

About Jason

My name is Jason Richards, and I am an attorney in Northern Utah. I run my own practice and have offices in Ogden and North Salt Lake. I grew up in Ogden and attended local public schools. I graduated from the University of Utah Law School with a juris doctorate degree. My practice primarily centralizes on bankruptcy and debt collection. I also specialize in criminal defense and other areas of civil litigation. I represent clients who are suffering from crushing debt that seems hopeless. I have helped many people file for relief under Chapter 7 and Chapter 13 of the United States Bankruptcy Code. I have also helped dozens of clients renegotiate their debt and defend them in debt collection actions with ruthless creditors. If not dealt with promptly and aggressively, creditors will achieve their goal to collect. Bankruptcy is certainly not the solution for everyone. Everybody's situation is different. The best way for you to determine if it is right for you is by consulting with a local bankruptcy attorney. Bankruptcy has helped millions of Americans receive a fresh start and financial independence.
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1 Response to Protection

  1. Pingback: Judgments | Ogden Bankruptcy Blog

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