Filing for bankruptcy provides certain protections from debt collectors. An automatic stay is issued after a debtor files for bankruptcy. Once the automatic stay is issued, most creditors cannot resume attempts to collect debts. However, some creditors may violate the automatic stay and commit collection harassment. A recent case that made its way through the 3rd Circuit Court of Appeals involved multiple stay violations that went far beyond phone calls. The 3rd Circuit Court of Appeals recently upheld a $50,000 emotional distress award stemming from a business bankruptcy. In the case, a husband and wife were terrorized by their landlord after their daycare center filed for bankruptcy. The couple accused the landlord of the following: Entering the daycare uninvited and backing one of the owners (the wife) against the wall. She claims the landlord began asking, “do you want to hit me?” multiple times. Returning to the business after hours…
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Businesses experiencing financial difficulties may be unable to pay their debts. Creditors may start filing lawsuits to cover their losses. Filing for Chapter 11 bankruptcy can shield businesses from judgments and other collection activities filed by creditors. An automatic stay is issued when a business files a petition for Chapter 11 bankruptcy. This means collection attempts against the business may temporarily grind to a halt. Creditors cannot seek judgments against the business unless they file a motion to lift the stay. An automatic stay can protect the properties and other important assets of a struggling business. However, Chapter 11 protections may offer businesses more maneuverability to handle their existing debts. There are other protections offered by the bankruptcy code that make this possible. Are There Other Benefits to Filing for Chapter 11 Bankruptcy? Chapter 11 bankruptcy allows a business to reorganize its debts (hence why Chapter 11 is called the…
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*Credit card payments will not be accepted for bankruptcy cases, unless pre-approved by The Sader Law Firm. If you have a question about a credit card payment, please call our Office Manager at (816) 561 1818.
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