The Short Answer
You are not required to answer phone calls from creditors, and once you have retained a bankruptcy attorney, you can direct creditors to contact the firm instead. Whether you should proactively tell a creditor you are filing bankruptcy depends on the type of debt — for a threatened credit card lawsuit, it may buy you time; for a pending mortgage foreclosure, it could actually hurt you. Once your bankruptcy is filed and you have a case number, the automatic stay is triggered and creditors are legally prohibited from contacting you. Until that case number exists, creditors can still reach out, but knowing how to handle those calls protects you throughout the process.
If you are receiving constant phone calls from creditors, you are certainly not alone. Many of our clients have received countless harassing phone calls, day and night, from creditors before the filing of their bankruptcy case. Whether you are considering coming into our office for a free consultation or you have already begun the process of filing bankruptcy, here are the things you need to know about creditors’ phone calls.
No, you are not required to answer a phone call from a creditor. Many clients have blocked the numbers that they recognize as being associated with specific creditors; others do not answer calls from any number they do not recognize; some have even changed their phone numbers. For more information on blocking phone calls from specific creditors and tips that may help with this process, you can look at this blog post.
While you do not have to answer creditors’ calls, there may be times when doing so could be beneficial. Once you have come into our office and had your free consultation, you will receive a packet of paperwork to fill out. Once you have completed that packet, submitted it to our office, and paid a fee, you will have retained an attorney. At that point, you may tell creditors “I have retained an attorney” and provide them with our contact information. Many times, creditors will begin to call our office instead of you. They will confirm representation and inquire which type of bankruptcy you may be filing.
While a creditor can still contact you up until the time you file bankruptcy and receive a case number, beginning the process of filing bankruptcy may allow for some much-needed relief.
It depends. Although this is not the most straightforward answer, whether you should notify a creditor that you are filing bankruptcy depends on the creditor, what the debt is associated with, and how much the debt is for.
For example, if you are several months behind on your mortgage and now have a foreclosure hearing date, we do not suggest telling your mortgage company you plan to file bankruptcy. Instead, you should attend your foreclosure hearing and ask for a continuance. If you tell the mortgage company you are filing bankruptcy, you will likely not be granted a continuance and may be given a sale date. There is a very short window for to us to file the bankruptcy and allow you to keep your home after this sale date has passed.
However, if a credit card company is threatening to sue you for late payments owed, you may want to tell them you are planning to file bankruptcy. In this case, the creditor may allow some time to wait for a case number before obtaining a lawyer and beginning the civil litigation process.
Most people are concerned telling a creditor they are filing bankruptcy will cause the creditor to act more quickly. In theory, this makes sense but, practically, creditors typically do not expedite their process due to a pending bankruptcy filing.
You should avoid giving your creditors specific timeframes. Unexpected questions may arise about the documentation you submit to our office; these questions oftentimes must be answered before your bankruptcy can be filed. Other times, personal complications may prevent you from filling out our paperwork as quickly as you originally believed you could. Therefore, give yourself plenty of time to complete the process and do not tell a creditor a specific date of when you expect to file bankruptcy. Remember, many times, less is more.
As previously mentioned, once you have retained a bankruptcy attorney, you can provide the firm’s information to creditors and instruct them to contact the firm instead. Creditors will often ask if you are a retained client, so please do not tell creditors that you have retained an attorney until after you have dropped off your bankruptcy paperwork.
After we have filed your bankruptcy, you can give creditors your case number and tell them you have filed bankruptcy. After this point, creditors cannot legally contact you again due to your automatic stay. The exception is if the Bankruptcy Court were to grant relief from the automatic stay which is rare.
If you continue to have creditors contact you after bankruptcy, you may tell them they are violating the automatic stay (federal bankruptcy law that gives folks who file bankruptcy relief from creditors collection efforts) and to contact our office with any concerns.
Key Takeaways
- You are never legally required to answer a creditor's phone call, and many people block numbers or screen calls while they prepare to file.
- Once you have officially retained a bankruptcy attorney — meaning you have submitted your paperwork and paid a fee — you can tell creditors to contact the firm directly.
- Do not tell creditors you have retained an attorney until you have actually completed that step, because creditors will verify representation before stopping their collection calls to you.
- Whether to tell a creditor you are filing bankruptcy depends on the debt type: it may pause a credit card lawsuit but could eliminate your chance of a continuance in a foreclosure hearing.
- Never give a creditor a specific date for when you expect to file — unexpected documentation issues or personal delays are common, and you do not want to create pressure around a deadline you may not meet.
- After your bankruptcy case is filed and a case number is assigned, the automatic stay is triggered and creditors cannot legally contact you further.
Attorney Insight
The mistake I see most often is a client telling their mortgage servicer they plan to file bankruptcy right before a foreclosure hearing — thinking it will help. It almost always backfires. The lender stops negotiating a continuance because they know a filing is coming, the hearing proceeds, and suddenly we have a sale date with a very narrow window to file and invoke the automatic stay before the sale closes. On the other hand, when a credit card company is threatening to file a civil suit in NC, mentioning a pending bankruptcy filing often causes them to pause — because they know a judgment here won't get them wage garnishment the way it would in most other states, so litigation becomes even less worth their time.
