Why don’t lenders send statements after bankruptcy?
Most people who file for bankruptcy choose to keep their mortgages and car loans outside of the bankruptcy, but these lenders stop sending the normal monthly billing statements when the bankruptcy is filed.
This can be confusing, and it comes at the worst time because bankruptcy changes so much about a person’s financial situation.
It can be difficult to keep on top of everything that is happening, so why don’t lenders send statements after bankruptcy?
THE REASON LENDERS STOP SENDING THE STATEMENTS AFTER BANKRUPTCY
The automatic stay is an injunction which says that no one can take any sort of action to collect a debt from the debtor.
This includes debts that you might want to keep out of bankruptcy such as:
- Car loans
- Credit cards
The automatic stay even works against the IRS and property taxes.
It is a very broad injunction that affects all types of debt.
Why do lenders take the automatic stay so seriously?
Mortgages, car lenders, and student loan servicers take the automatic stay very seriously.
- Remember, the automatic stay says that they cannot take “any act” to collect a debt
Sending the normal billing statement counts as an act, so they are very careful about sending them.
They don’t want to be sued for violating the automatic stay, and so they don’t send statements after bankruptcy.
In my opinion, this is too cautious.
They could avoid a lot of confusion and late payments if they would let people know that they are stopping the statements.
They could also put a term in their account agreements which says that they can send billing statements for “informational purposes” rather than to collect a debt.
CAN I GET THEM TO SEND THE STATEMENTS AGAIN?
Most creditors will start sending the statements again if your attorney sends a letter promising not to count the statements as a violation of the automatic stay.
I send these letters out for my Minnesota bankruptcy clients on a daily basis.
It is important to me that all of my clients know exactly what is happening in their cases.
Bankruptcy is complicated, but I work to make sure my clients understand the process and know how to work with the system.
HOW DO I MAKE MY PAYMENT WITHOUT A STATEMENT?
Many people are accustomed to using the statements both as a reminder to make the payments, and as a way to make the payment.
You can pay loans even without the coupon that comes in the monthly statement.
You should write the loan number in the memo field of your check, and mail it to the payment address for the lender.
A money order or cashier’s check also works for this.
You can find the payment address from an old statement, or by an internet search.
They will also probably stop any automatic or ACH payments that you have set up, and may not accept phone payments.
The bankruptcy automatic stay also applies to these.
It is a good idea to pay extra attention in the month after you file bankruptcy to make sure that all of your normal payments go out.
Sometimes things like utility and insurance payments will be stopped by your bank.
For reasons like this, I do not recommend having any bills on automatic payment.