Collection Activity after Filing Bankruptcy: When Will Creditors Stop Calling?
There should be no collection activity after filing bankruptcy or consumer proposal. Creditors will stop calling once they are notified that you have filed a consumer proposal or bankruptcy in Canada.
Within five days of your filing, your trustee will notify your creditors of your bankruptcy or proposal. Most trustees will mail the notice of bankruptcy to your creditors, so if it takes the trustee a week to mail the package, and it takes another week in the mail to reach the creditor, it may be two weeks before they are aware of your bankruptcy.
Many trustees are now faxing or even e-mailing bankruptcy notices to creditors, so the times noted above may be reduced.
Of course just because the creditor has received the notice from the trustee, it doesn’t necessarily mean that they have entered the bankruptcy into their system, so calls may continue until they do.
A further complication occurs when a creditor, such as a bank or credit card company, has turned your account over to a collection agency. The bank or credit card company may be notified of your bankruptcy, but if they are slow to notify the collection agency, the calls will continue.
That being said, you really have nothing to worry about. Creditors can undertake no collection activity after filing bankruptcy or a consumer proposal. In fact, you are not allowed to pay an unsecured creditor after you go bankrupt, and knowing this the creditors will stop calling you simply because behaving differently makes no sense.
Our advice for when either creditors or collection agents call is to simply advise them that you have filed bankruptcy (or a proposal) and give them the name and phone number of your trustee. Your trustee will then communicate directly with them, and forward on to them the necessary paperwork.
For more information about when creditors stop calling after filing bankruptcy and bankruptcy in general, contact a personal Licensed Insolvency Trustee in your area.