Arizona Laws on Creditor Harassment during Bankruptcy Proceedings

As a general rule of thumb, debt collectors cannot come in contact with debtors once these individuals complete the bankruptcy filing. Regardless of the legal provisions in Arizona, however, some debtors still experience problems and even harassment on behalf of the creditors. You’re entitled to certain protections from creditor harassment during bankruptcy. If debt collectors are still trying to contact you and push you to pay, you may want to do the following.

Know What Unfair Debt Collection Practices are

Even if you haven’t done the bankruptcy filing yet, you’re still protected against questionable methods of debt collection.

Harassment from creditors can come in many forms. These practices are prohibited by the Fair Debt Collection Practices Act and they may be:

  • Frequent phone calls, especially outside work hours (from 8am to 9pm)
  • Contacting a debtor at their employment place, even when the person points out such debt collection efforts are unacceptable
  • Prolonged phone ringing and frequent attempts to call for the purpose of annoying a debtor or making them feel uneasy
  • Misrepresentation and deceptive practices
  • Including personal information about a debtor on a list that’s published openly
  • Increasing the repayment amount beyond reasonable limits
  • Abuse and the use of obscene language during the communication with the debtor
  • Communication with third parties for the purpose of putting pressure on a debtor
  • Failure to cease communication upon request

What to do if Persistent Debt Collection Efforts Continue during Bankruptcy

creditor harassment during bankruptcyYour bankruptcy filing puts an automatic hold on all debt collection efforts. Creditors are not allowed to get in touch with you or push you to pay.

Any attempt to collect money is a violation of the automatic stay that comes in effect as soon as the documents are filed. In case a creditor commits such a violation, you may want to do one of the following:

  • Notify the creditor about the bankruptcy: being contacted persistently could be the result of a mistake. Before moving on to more serious measures, you may want to communicate news about the bankruptcy with the creditor. Collectors could be unaware of the situation and this would be the easiest way to end the harassment.
  • Let the bankruptcy court know: if you’ve done everything you can to communicate with the collector and they’re still trying to contact you, get in touch with the bankruptcy court. The court can sanction creditors and debt collectors for a violation of the automatic stay. Depending on the situation, the court may impose fines and ask the collector to pay additional damages (punitive damages aren’t applicable in this situation).
  • File a lawsuit: depending on the advice you get from your attorney, you could also file a lawsuit against the collector. Collectors could be violating certain laws on top of the automatic stay through their persistent attempts to get in touch with you. These include the Arizona Deceptive Trade Practices Law, the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. By filing a lawsuit, you can collect punitive damages (if the court determines that a violation of any of the laws mentioned above has occurred).

The automatic stay protects you during the bankruptcy. After the discharge, you’re also entitled to certain kinds of protections. Collectors do not have the right to contact you or harass you for payments on debts that have been discharged.

The only exception applies to secured loans. Whenever there’s a collateral, the creditor could potentially have the right to repossess it in the aftermath of the discharge. If the debt remains unpaid, the creditor will have the right to pursue this option. Repossession is an actual risk to prepare for and may not be considered creditor harassment during bankruptcy. You should discuss exhaustively with your attorney while getting prepared for the bankruptcy filing.