Will bill collectors stop calling after filing bankruptcy?

On the powerful protections in a bankruptcy case is the automatic stay. In a typical voluntary bankruptcy, this stay is completely automatic, and goes into effect upon filing the bankruptcy petition without any action from the court. Among the activities stayed is communication from a creditor seeking payment of the debt.

The bankruptcy court sends official notice of the bankruptcy case to all listed creditors shortly after the case is filed. As needed, the debtor's attorney may also provide notice of the filing directly to creditors. While the stay applies regardless of knowledge of the stay, putting a creditor on notice of the stay is important to actually stopping communication. Willful violations of the automatic stay can result in award of damages, including actual damages, attorneys fees, and in some situations punitive damages. Debtors should be careful to maintain records of any communications they receive once the bankruptcy is filed.

The automatic stay originates from the idea that fairness in a bankruptcy process requires everyone to stop trying to collect while the bankruptcy process sorts out how each party is paid compared to each other. It provides valuable breathing room while the bankruptcy proceeds towards more final relief, principally the bankruptcy discharge.