Can creditors call on the consumer debtor for payment after bankruptcy?
Once the consumer debtor is placed into bankruptcy, any creditor with a claim provable is prohibited from proceeding with any action against the consumer debtor. In other words, the creditor cannot start or continue any lawsuit to collect on the debt. That creditor needs permission of the court, technically called “leave of the court”, to do so and in almost all cases, the court will not give the creditor that permission.
Once creditors know that the consumer debtor is bankrupt, they will stop harassing the consumer debtor and not send demand letters for payment. All institutional creditors know the bankruptcy process and they will not bother the consumer debtor anymore. These creditors will work through the trustee in bankruptcy if they foresee a problem or obtain a special order of the court if the trustee refuses or they have a special claim.
In some cases, creditors will have claims that will survive bankruptcy discharge. Those claims, as set out in Chapter 7, relate to fines and penalties, claims for alimony, maintenance and support, and claims based on fraud or misrepresentation. In these types of claims, the creditor can sue the bankrupt after the bankrupt and the trustee are discharged. If the creditor wishes to proceed earlier than that, then the creditor requires a special order or leave of the court to do so.
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