How Bankruptcy Can Help Stop Harassment from Creditors

Debt can become overwhelming, and constant calls, letters, and threats from creditors only make it worse. Financial struggles shouldn’t come with intimidation, yet many creditors push legal and ethical boundaries to collect what they’re owed. 

Fortunately, bankruptcy law provides a way to put an end to relentless collection efforts. At The Law Office of Victor Druziako, P.C., I help individuals in New Jersey use bankruptcy law to stop creditor harassment and regain control of their financial lives.

Creditor Harassment

Debt collection is a business, and creditors use aggressive tactics to recover what they believe they’re owed. Some follow legal guidelines, while others cross the line. Harassment can take many forms, including:

• Frequent and aggressive phone calls at all hours

• Threatening letters demanding immediate payment

• Public embarrassment, such as contacting an employer or family members

• False claims about legal action, such as arrest threats

• Continuing to collect on a debt that has already been discharged

Federal and state laws exist to protect individuals from these tactics, but some creditors ignore these laws, assuming debtors won’t fight back. Bankruptcy law provides one of the strongest protections against these aggressive collection methods.

The Automatic Stay

When I file a bankruptcy case for a client, one of the most immediate benefits is the automatic stay. This is a court order that stops creditors from taking any further action to collect a debt. The automatic stay applies to most forms of debt collection, including lawsuits, wage garnishments, and foreclosure proceedings.

Under bankruptcy law, once a case is filed, creditors must stop calling, sending letters, or taking legal action. If they continue their collection efforts, they may be subject to penalties. This protection gives individuals relief from constant harassment, allowing them to focus on their financial recovery without the pressure of aggressive creditors.

Stopping Wage Garnishment and Lawsuits

Many people dealing with significant debt also face wage garnishment, where a portion of their paycheck is deducted to pay creditors. This can create an impossible financial situation, making it difficult to cover basic expenses like rent, food, and medical bills.

Bankruptcy law stops wage garnishment immediately when a case is filed. This allows individuals to keep their full earnings while their bankruptcy case is processed. In some situations, it may even be possible to recover wages that were previously garnished.

Lawsuits from creditors are another concern for many individuals in debt. Once a lawsuit is filed, it can lead to judgments, liens, and even property seizures. Bankruptcy law stops these lawsuits in their tracks, preventing further legal action. In many cases, the debts that led to these lawsuits can be eliminated entirely through bankruptcy.

Stopping Foreclosure and Repossession

For those struggling to keep up with mortgage or car loan payments, bankruptcy law offers solutions. Foreclosure and repossession are among the most stressful experiences a debtor can face, but filing for bankruptcy can provide immediate relief.

Chapter 13 bankruptcy allows individuals to restructure their debts and catch up on missed payments over time. This can help homeowners stay in their houses while creating a manageable repayment plan. 

Even in Chapter 7 bankruptcy, the automatic stay can provide extra time to explore options such as loan modifications or selling property on better terms. A professional in bankruptcy law can assist with getting you the extra time you need to get finances together.

Different Bankruptcy Options Under New Jersey Law

Individuals in New Jersey generally have two options when filing for bankruptcy: Chapter 7 or Chapter 13. Each serves a different purpose, and choosing the right one depends on financial circumstances and goals.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy eliminates most unsecured debts, such as credit card balances and medical bills. This process is relatively quick, often taking just a few months. However, it requires individuals to meet income qualifications, meaning higher-income earners may not be eligible.

Under New Jersey’s exemption laws, many individuals who file for Chapter 7 can keep essential assets, such as their primary residence, vehicle, and personal belongings. Once the process is complete, eligible debts are discharged, providing a fresh financial start.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a structured repayment plan that allows individuals to reorganize their debts over three to five years. This option is particularly useful for those with steady incomes who want to avoid foreclosure or repossession.

By consolidating debt into a single monthly payment, Chapter 13 bankruptcy makes repayment more manageable. Once the repayment period is complete, remaining eligible debts may be discharged. This option allows individuals to keep valuable assets while working toward financial recovery.

Holding Creditors Accountable for Violations

Bankruptcy law does more than just stop harassment—it also holds creditors accountable when they ignore legal protections. If a creditor continues to attempt collection after a bankruptcy filing, they can face consequences, including fines and court sanctions.

In cases where creditors attempt to collect on debts that have already been discharged, they may be in violation of federal bankruptcy law. These actions can be reported to the court, and debtors may be entitled to financial compensation for damages. 

At The Law Office of Victor Druziako, P.C., I take legal action against creditors who disregard bankruptcy protections and continue to harass my clients.

Life After Bankruptcy

Filing for bankruptcy provides immediate relief from creditor harassment, but it also opens the door to a more stable financial future. Many individuals worry about how bankruptcy will affect their ability to borrow money in the future, but the reality is that bankruptcy can often be a step toward rebuilding credit.

After bankruptcy, individuals can take steps to improve their financial situation, including:

• Making on-time payments for bills and necessary expenses

• Using secured credit cards to rebuild credit history

• Monitoring credit reports for accuracy and disputing any errors

• Creating a budget to manage expenses and avoid future debt problems

By following these steps, many people find that their credit begins to recover sooner than expected. Bankruptcy law provides an opportunity to start fresh, free from the constant stress of collection efforts and financial uncertainty.

Debunking Myths About Bankruptcy and Creditor Harassment

Many people hesitate to file for bankruptcy because they fear the consequences or believe certain myths about the process. Some of the most common misconceptions include:

• "Bankruptcy ruins credit permanently." While bankruptcy does impact credit, many individuals see improvements within a year as they begin to rebuild.

• "Creditors will still try to collect after bankruptcy." Once a debt is discharged, creditors are legally prohibited from further collection attempts.

• "Only irresponsible people file for bankruptcy." Financial hardship can happen to anyone due to job loss, medical expenses, or other unexpected circumstances. Bankruptcy law exists to help those who need a fresh start.

Understanding the truth about bankruptcy can help individuals make informed decisions about their financial future.

Take the First Step

If you’re ready to end the constant harassment from creditors, it’s time to seriously consider the benefits of bankruptcy. At my law firm, I’m dedicated to helping individuals use bankruptcy law to find relief from overwhelming debt.

I’m proud to serve Vineland, New Jersey, and the rest of South Jersey. Call the Law Office of Victor Druziako, P.C. today to schedule a consultation and get creditors off your back with bankruptcy.