When Must Creditors Stop Collection Activity?

Your creditors must cease all ongoing collection activity as soon as you file your completed petition with the appropriate bankruptcy court. Also, they can no longer initiate any new collection action after you file. You need to prepare and file all other required documents (schedule of assets and liabilities and income and expenses, personal financial statement, proof of current income, reorganization plan) on time with the court to guarantee your continued protection. Finally, per the new regulations, you must provide the court with evidence of completion of a credit counseling course. Please remember that, should you not make Chapter 13 payments to any “secured” creditors (mortgage lender, auto finance lender, etc.), your protection from them can stop and they can initiate new collection action to protect their collateral.