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Virginia Bankruptcy Law - "What happens if creditors try to collect while bankruptcy is pending?"
If creditors attempt collection any debt while a Virginia bankruptcy case is pending, court sanctions
may be ordered by the court. Creditors are allowed to collect only specific debts
and take specific actions which are authorized by the court. 11 U.S.C. 362 sets
forth exceptions to the automatic stay. If a creditor desires to proceed with
collection efforts, a motion must be filed seeking permission. Creditors who fail to obtain court permission are
subject to sanctions. If creditors attempt collection of a discharged debt after a case is closed,
the procedure is similar. The debtor may ask the court to reopen the case and
impose sanctions upon the creditor. Available sanctions include a finding of
contempt of court, specific injunctive relief, and the imposition of fines and
incarceration. The most common sanction is the imposition of a civil fine.
Virginia Bankruptcy Law - Employer Liability
The code also specifically prohibits employers to discriminate against
employees because of bankruptcy. To become actionable, the employee's
bankruptcy proceeding must be the sole basis for discrimination. In practice,
employers are well versed on discrimination law, and well advised by their
attorneys concerning "plausible deniability." Any other basis, such as those
commonly documented by memorandum warning of poor job performance, often relieve
employers from liability. For employees, the bankruptcy discrimination statute is
grossly ineffective.
Be aware that all options are not available to all debtors. The availability of alternatives depends on
several factors. State & federal laws change frequently through the legislative process and through court
interpretations. Each debtor presents a unique financial history and assortment of debts. Local rules and
customs vary. Nevertheless, all debtors gain the maximum benefit available similarly: careful planning and
selection of options before filing.
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