As if filing for bankruptcy is not emotionally challenging enough, some debtors are feeling the effects of creditor intimidation through Facebook and other social networking media. In the age of social media, creditors have found a new way to hound and harass debtors and in the process, ultimately violate the automatic stay.
In case 12-024420-DD, Jessica J. Bolin, The United States Bankruptcy Court for the District of South Carolina recently ruled in favor of the debtor who claimed a creditor was harassing her by posting derogatory remarks on her Facebook page. The debtor filed for Chapter 7 bankruptcy on April 17, 2012 and at that time the automatic stay, an injunction that prohibits creditors from attempting to collect debts from a debtor who has filed bankruptcy, went into effect. After receiving notice of the debtor’s bankruptcy filing and refusing the debtor’s attempts to have her cease and desist, the creditor continued to send harassing emails and posted negative comments on both the debtor’s business website and her Facebook page. The debtor eventually hired an attorney and a filed a Motion for Sanctions seeking damages against the creditor for the “willful and intentional violation of the automatic stay.” The court agreed with the debtor and awarded the debtor $2,100.70 in actual damages and $5,000.00 in punitive damages stating, “It is clear from the evidence presented to the Court that [the creditor] knew of the bankruptcy filing and continued to contact Debtor for the purpose of collecting a pre-petition debt. [The creditor] received actual notice of the bankruptcy. In fact, this notice appeared to prompt her threatening and offensive actions against Debtor.”
Once a creditor is notified of a bankruptcy filing, all collection efforts must immediately stop. That includes phone calls, mailed bills or letters, foreclosure proceedings and even collection efforts made through social media. If a creditor continues to seek collection once it has been informed of the bankruptcy filing, it may be held liable and sanctioned by the court.