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Question
I hired a lawyer and started the process of filing chapter 7 bankruptcy.  now in once place it says that once you hire a lawyer and began the process that the payday loan company has to stop all collection attempts as soon as they are notified.  I notified them and they spoke with my lawyer who confirmed that I was in the process of filing chapter 7 and the payday loan company proceeded to electronically withdraw several hundreds of dollars from my account causing a huge overdraft in my checking account.  The payday loan company said that because I did not have a case number yet that they could do this but the law I could find says as soon as the company was notified that I was in the process and had retained legal counsel that they could no longer collect.  Which is accurate please.

Answer
The automatic stay prohibiting bill collection activity goes into effect the instant that the bankruptcy is filed, whether they have received ACTUAL notice of not.   These people (the pay day loan people) are acting foolishly.   Under these circumstances they have exposed themselves to personal and corporate liability for violating the stay order.   What's more, you can get back what has been taken already since the bankruptcy was actually filed.   


Are you absolutely sure that the case has been filed?    You can call me right now if you wish and we can see exactly what the status of the case is.    I can look it up on the computer if you call me.   I will not charge you just to talk on the phone.    

If he case was indeed already filed, you can file paperwork with the bankruptcy court asking the judge to find them in contempt of court.    I have had cases before where the judge actually fined the creditor for violating the bankruptcy order, and the debtor (in this case you) would get to keep that money that they pay for a fine.    In other words, if you handle this right, they could end up owing you money.   


It is Monday afternoon on December 24th.   You just submitted this question a few minutes ago.   You can call me right now if you wish at this number.     915  261-3893   

Jack Hall, J.D.
Hall Bankruptcy Services

Collections Law

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