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When a bankruptcy notice arrives, the worst thing a creditor can do is ignore it.
Once the bankruptcy petition is filed, the debtor is under the bankruptcy court's protection. An "automatic stay" occurs immediately when the case is filed, preventing creditors from taking any collection action. Telephone calls, letters, asset repossession or seizure, pursuing lawsuits, and obtaining liens or judgments are all prohibited actions.
A creditor that ignores the automatic stay or takes action against the debtor can be subject to sanctions by the bankruptcy court, which can include an order to pay damages and attorneys's fees to the debtor or worse yet, an order for arrest for contempt of court.
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Contact KIRK & SIMAS with your creditor rights or collection questions or schedule a consultation today.
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