Arizona Bankruptcy Law - "What happens if creditors try to collect while bankruptcy is pending?"
If creditors attempt collection any debt while an Arizona 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.
Arizona 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.
The Federal process of filing necessarily incorporates state law requirements. These state law requirements are
set forth in statutes, rules and case law opinions which frequently alter the operation of law. As a result of
these precedents, Arizona bankruptcy cases are unique to the state, as well as unique to each individual who
files. All alternatives provided by law may not be available because of differing individual financial histories
or prior case filings.
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