The Short Answer
When you file for bankruptcy, the automatic stay goes into effect — and many mortgage and auto lenders will stop sending you statements entirely to avoid any appearance of violating it. This doesn't mean your payments are on hold. You are still legally required to make your mortgage and car payments on time if you intend to keep those assets. Simply call your lender and request that they continue sending statements; most will comply, sometimes after a brief confirmation through your bankruptcy attorney.
http://www.youtube.com/watch?v=NJEk651CFqE
Once you file a bankruptcy, an automatic stay goes into effect. This automatic stay states that no creditor can try to collect any debt from you; according to statute 11 U.S.C § 362 (6), “any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title”. If a creditor does contact you with payment demands, a Charlotte bankruptcy lawyer or Greensboro bankruptcy lawyer can file what’s known as a “motion for sanctions” which reprimands the creditors attempting to collect the debt.
Even though you are current, and are going to keep your house or car; many creditors will still not send you a bill once you have filed the bankruptcy. Ever heard the phrase, “better safe than sorry”? Well, this is exactly why you are not receiving your statements now; they do not in any way want to violate the automatic stay. If you had set up automatic bill pay, this will likely stop as well. You just have to remember regardless of whether you receive a bill, you must continue to make your house or car payment! If not, the creditors have the legal right to foreclose on your home or repossess your vehicle.
What can you do? Simply call them and request that they still continue to send you your statements. They may send something to your bankruptcy attorney asking for he/she to sign off to give permission for you to resume receiving statements for their records, but in most cases, it is as simple as that. Again, the main reason a creditor stops sending you statements is because they do not want those statements to be viewed as an effort to collect a debt which would violate the automatic stay that goes into effect when your bankruptcy is filed.
Key Takeaways
- Filing bankruptcy triggers the automatic stay, which prevents creditors from taking any action to collect a debt — including sending payment statements.
- Lenders stop sending mortgage and car statements out of caution, not because your obligation to pay has gone away.
- Missing payments because you stopped receiving a bill can lead to foreclosure on your home or repossession of your vehicle.
- Automatic bill pay arrangements may also stop when you file, so you need to monitor those accounts manually.
- You can call your lender directly and ask them to resume sending statements — it is usually a simple request.
- Your lender may ask your bankruptcy attorney to sign off before resuming statements, but this is routine and typically quick to resolve.
Attorney Insight
The mistake I see most often is clients assuming that no bill means no payment is due — and then they fall 30, 60, 90 days behind on a mortgage they fully intended to keep. By the time they realize what happened, the lender has already filed for relief from the automatic stay and the path to saving the house has gotten much harder. If you filed and your statements stopped, pick up the phone and call the lender that same week. Don't wait for us to bring it up at your next appointment — the clock on your payment due date doesn't pause just because the paperwork did.
