When Texas residents file for bankruptcy protection their creditors are generally no longer allowed to contact them. As soon as an individual files for bankruptcy, an automatic stay is in place that puts a halt to collection activity – this includes contact by mail and phone and wage garnishment. And, of course, once the bankruptcy process is complete and debts are discharged, collectors can no longer collect those debts.
In some cases, creditors violate the rights of Americans and continue attempts to collect debts during the automatic stay and after debts have been discharged. When this happens, consumers should talk to their bankruptcy attorneys about their rights.
A Collin County man has sued SunTrust Mortgage Inc. and PennyMac Loan Services LLC, accusing the companies of continuing to pursue debts post bankruptcy.
According to the lawsuit, the man’ debts were discharged Jan. 22, 2013. SunTrust, which received a notice of the discharge, sold the man’s account to PennyMac. PennyMac also had a notice of the man’s bankruptcy case, but it nonetheless kept trying to collect the debt.
The man claims that PennyMac mailed him collection letters and statements and even visited his home. The company also allegedly accessed his credit report without permission.
The man is now suing these companies to stop the harassment and obtain compensation for the damages this has caused him.
The merits of this case are not known, however, this should remind Texas residents that creditors do not have the right to continue collection actions during the automatic stay or after a discharge. Often, informing the collector of the bankruptcy will encourage the collector to stop, but if the collector does not correct its actions it may be important to take legal action.
Source: The Southeast Texas Record, “SunTrust Mortgage, PennyMac sued for violating bankruptcy discharge injunction,” Whitney Brakken, Jan. 15, 2014