Ford Heights Bankruptcy Lawyer Answers The Question: Do Creditors Ha...

The short answer is yes.  The long answer is yes.  Pursuant to 11 U.S.C. 362, which is known as the automatic stay, all creditors are bound by law to stop harassing you.  The automatic stay is a restraining order.  It’s designed to protect debtors in bankruptcy, prohibits any sort of collection action against property of the bankruptcy estate, against the debtor; prohibits a perfection of any sort of lien or anything like that.  It’s very, very broad, very, very strong.  It also has teeth.  Under 362(h) violation of the stay, that is when a creditor breaks the injunction and tries to collect from a debtor who’s in bankruptcy can result in sanctions, including punitive damages and an award of attorney’s fees for the cost of bringing the sanction.