As soon as your bankruptcy is filed the Automatic Stay goes into effect. The Automatic Stay is a very important and helpful part your bankruptcy as it protects you from collection actions by your creditors.
That means that once you file for bankruptcy, all of your creditors who are bound by the Automatic Stay, which are most of your creditors, cannot contact you in any way and attempt to collect on your debts.
Aside from child support, alimony and most taxes, all of your creditors must abide by this law, even the creditors that you intend to pay back, like your car or house payments.
The Automatic Stay restricts your creditors from contacting you whatsoever without an Order from the Court or written consent from your attorney. Check out our series on “Paying Bills During Bankruptcy” to learn more about which bills need to be paid once you file. Because your creditors cannot bill you regularly as they did before, it is very important that you stay current on the obligations that you will still be accountable for once your bankruptcy is filed.
While clearly most of us would interpret “no contact” to mean the creditors can no longer make those harassing calls or send you bills. However, some creditors take this to another level and will actually not accept your payments until they received your signed reaffirmation agreement.
Wells Fargo and other banks even go so far as to restrict your online access to your loan accounts during the pendency of your bankruptcy. Don’t be alarmed if you encounter difficulty when trying to make these payments. You can either save your payments until your reaffirmation agreement is submitted, or make the payments in person. Once your reaffirmation agreement is on file, you can resume your normal bill paying processes.
Read our blog “What If A Creditor Contacts Me After I Filed Bankruptcy?” to learn how to deal with violations of the Automatic Stay.