A person who owes a debt to another is called a “debtor.” The person to whom the debt is owed is called the “creditor.” You will hear these words in the bankruptcy courts and possibly through the collection efforts of creditors.

Collection Efforts of Creditors

When debtors get behind in the repayment of debts, creditors and collection agencies can be relentless. Most people want to pay back their debts, but many are not always able. There are many, many people affected by the current economy and unexpected loss of income.

While there are laws that prevent creditors and collection agencies from maliciously embarrassing debtors or attempting to collect debts through false threats, creditors and collection agencies are permitted to contact debtors in a reasonable manner and make threats that they will take legal action against the debtors if the debt is not paid.

Often, as debts increase and bills continue to remain unpaid, collection efforts increase. Debtors will receive more and more phone calls from different creditors attempting to collect on debts that the debtor simply can’t pay. If you find yourself in this situation, you must first decide if bankruptcy is the right option for you. There are different types of bankruptcy filings with different results. It is important to speak with someone knowledgeable about your options before making a decision.

Filing the Creditor Matrix and the Automatic Stay

If you decide to file for bankruptcy you will have to provide clear accounts of your creditors and your debts. Upon filing for bankruptcy you will also have to provide a document called a “creditor matrix.” A creditor matrix is a list of all of your creditors.

The Automatic Stay

Upon filing for bankruptcy, the Court will put in place an “automatic stay.” The filing of a bankruptcy petition automatically stays (stops) most actions, including collections, against the debtor or the debtor’s property. It is called “automatic” because the stay begins automatically at the time the bankruptcy case is filed with the Clerk’s Office.

Once the stay is in place, creditors are prohibited from taking certain actions against a debtor. This can provide great temporary relief to debtors.

The Creditor Matrix

The creditor matrix you must file is a list of the names and current addresses of all creditors and other parties that should have notice of a bankruptcy. It is prepared by a debtor or the debtor’s attorney and must be filed at the same time the bankruptcy petition is filed.

As a debtor, it is your responsibility to ensure you have listed current, valid addresses for your creditors. If mail sent by you or the Clerk’s Office regarding your bankruptcy comes back as “undeliverable,” it is your responsibility to try to find a good address for the creditor and notify the Clerk’s Office of the good address. Additionally, if you obtain a different address for a creditor after you file your bankruptcy, you must notify the Clerk’s Office in writing of the new address.