Should I Tell My Creditors That I’m Filing Bankruptcy?

By Julie O'Bryan, Esq.   March 16, 2012  Bankruptcy, Creditor Harassment, lawsuits 2 Comments

Creditor harassment is a common reason people visit our bankruptcy attorneys at the O’Bryan Law Offices. Collection calls can be a source of frustration and embarrassment to Kentucky and Southern Indiana residents. So once you have decided to file bankruptcy, should you tell your creditors?

The answer to this question depends on a number of things. First, have you hired an attorney?  Once you retain bankruptcy counsel, you can inform your creditors, “Don’t talk to me; call my attorney!” The Fair Debt Collections Practices Act (FDCPA) prohibits third party collectors (collection agencies, attorneys, etc.) from speaking with you once they know you are represented by an attorney concerning the debt. Hiring a bankruptcy attorney can provide immediate relief and peace of mind to many who have been harassed by creditors. Ignoring the FDCPA and continuing to harass you can cause serious trouble for the collector.

The second issue is, “Can telling the creditor that you are filing harm you?” Hiring an attorney and intending to file bankruptcy are not the same as actually filing your bankruptcy case. Until you file you are not under federal bankruptcy protection, and a secured creditor may try to repossess property. For instance, if you are several payments behind on your car loan, the lender may decide to quickly repossess your vehicle to avoid complication and delay by the bankruptcy. You may get your vehicle back after you file a Chapter 13 case, but it may take a few days or longer. You will not get your vehicle returned if you file Chapter 7. Once you file your bankruptcy case, the creditor may not repossess property without the bankruptcy court’s permission.

Finally, creditors hear “I’m filing bankruptcy” every day. Are you able to file your case quickly, or will it take awhile? An original creditor (i.e. the one who loaned you money or extended credit) is not subject to the FDCPA. If you do not follow through quickly with your threat to file bankruptcy, the creditor may soon renew and increase its efforts.

Your attorney at the O’Bryan Law Offices is in the best position to instruct you whether to tell your creditors that you intend to file bankruptcy. For many, the answer is “Yes,” but there are special circumstances when it is best to avoid disclosing a pending bankruptcy action. Consult with our experienced Kentucky and Southern Indiana bankruptcy attorneys and get the advice you need. Call the O’Bryan Law Offices at 502-339-0222 for a free consultation.


2 Responses to “Should I Tell My Creditors That I’m Filing Bankruptcy?”

  1. Alex on April 5th, 2013 3:06 pm

    This article was awesome!! Thank you. Being fairly new to the bankruptcy arena I am constantly trying to gather as much information as possible to try and keep myself headed in the right general direction. Spending some time on this post has actually given me a lot of great points to think about. In my recent research I have also been able to find some pretty useful information related to this topic when I Googled the credit locker university. Thanks again!

  2. Jake on December 16th, 2013 4:09 pm

    I’m hoping that I won’t have to go bankrupt. I am currently disputing the negative items on my credit report and working with my creditors. I do like that I can dispute the items myself, without the help of a credit repair company. I just don’t want to spend my money that way. I Googled ‘credit software’ and found an organized way to do it myself. Time will tell.

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