One of the first realizations that a person can’t dig themselves out of a financial hole comes with the repeated calls from creditors and collection agencies. While this may prompt realization of the drastic need for action, it can also increase stress, it may be bothersome, and it may interfere with the other duties a person must engage in his or her daily life.
The Automatic Stay Ceases Collection Actions
When a person files for bankruptcy, an “automatic stay” is ordered. An automatic stay ceases most actions, including collections. It is an order that you and your debts are essentially on hold. When you complete and file the initial required documents for bankruptcy this stay is automatically put into place.
The Court Clerk’s Office mails written notice to all of your known creditors regarding the automatic stay. The Court Clerk obtains information about the identity of our creditors from your filing. If you forget to put a creditor on your filing documents, the court clerk will not be able to notify that creditor of the automatic stay. Therefore, it is important to be complete and thorough in your filings.
Additionally, if a creditor is not informed of your bankruptcy petition, your debt with that creditor may not be discharged in the bankruptcy proceedings. This is another reason it is very important to be complete in your bankruptcy filing documents. Once creditors receive notice of the automatic stay, creditors will no longer be permitted to take certain actions against you.
The Creditor Matrix
As part of the bankruptcy filings you will submit a creditor matrix. This is the document that will contain the list of creditors who will receive notice of the automatic stay. A creditor matrix 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 you or your attorney and must be filed at the same time the bankruptcy petition is filed.
As a debtor, it is also 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.