Can a Creditor "Opt Out" of the Bankruptcy?

So many of my clients have been subject to outrageous scare/humiliation tactics by unscrupulous creditors that I could easily write a short novel about it.  Nearly all of these tactics are illegal under the Fair Debt Collection Practices Act so the methods must be working pretty well for creditors to keep using them.

Today I had a client tell me that a creditor called her at work and demand payment.  We had listed the creditor in the bankruptcy and my client told that to the person on the phone.  The creditor said they had "denied" the bankruptcy and were seeking to collect anyway.

WRONG!  Creditors do not get to choose whether to "accept" or "deny" a bankruptcy.  Unless the creditor is a government agency or a secured creditor (like a home or a car lender, for example), the creditor won't be getting to "deny" a bankruptcy.  A bankruptcy filed in the United States Bankruptcy Court applies to all debts and includes all creditors.

Official bankruptcy is different from these so-called "debt settlement" programs you see advertised all over the place.  Those non-governmental programs do not require a creditor to participate and all too often some of the creditors in those programs do not participate.  Instead, they go after the debtor directly, garnishing her wages and bringing the whole "settlement" program crashing down.  Not going to happen in Bankruptcy.

So what happened to my client in the illustration above?  As with most bullies, once you stand up to them they leave you alone.  I advised my client that the next time the creditor called, my client should tell the creditor that she was keeping a log of all the illegal contacts and that we would be filing a motion in bankruptcy court to get sanctions of $5,000 for every attempt to collect that creditor made.  My client told the creditor she hoped the creditor would keep calling so she could get enough to put her kids through college at the creditor's expense!

No more phone calls.  :)