When Debt Collectors Violate the Bankruptcy Stay in Maryland

 Posted on October 24, 2025 in Consumer Protection

The automatic stay is one of the strongest shields in bankruptcy, as an immediate court order that halts all collection efforts. Unfortunately, in Maryland and across the nation, some creditors and debt collectors push these legal limits, sending demand letters, garnishing wages, and making harassing phone calls after bankruptcy has been filed and the automatic stay has been issued.

Under federal law (11 U.S.C. Section 362(k)), debtors can recover damages for willful violations of the automatic stay. The state of Maryland goes a step further under the Maryland Consumer Debt Collection Act and the Maryland Consumer Protection Act, which provide additional remedies when a debt collector crosses the line.

You need to understand what protections you are entitled to after filing for either Chapter 7 or Chapter 13 consumer bankruptcy. A highly skilled Montgomery County, MD bankruptcy attorney can explain how state-level protections can turn a relatively simple violation into a powerful enforcement claim.

What Are the Federal Remedies for Violations of the Bankruptcy Automatic Stay?

The automatic stay halts calls, lawsuits, repossessions, and garnishments; however, due to poor record-keeping, third-party collectors, and automated systems, creditors may violate the stay. If the creditor willfully violates the bankruptcy stay, the available damages include actual losses, attorney’s fees, and, in particularly malicious or egregious cases, punitive damages as well. Federal bankruptcy courts rarely award substantial emotional distress or statutory damages without clear and compelling proof.

What Are Maryland Remedies for Violations of the Bankruptcy Automatic Stay?

Maryland prohibits debt collectors from engaging in conduct that violates any state law that regulates debt collection. Courts have held that violating the automatic stay under the Maryland Consumer Debt Collection Act constitutes a violation of the Act. Under this Act, damages for emotional distress and humiliation are possible, and, unlike the federal law, it does not require "willful" behavior on the part of the debt collector.

Under the Maryland Consumer Protection Act, there is an additional cause of action when the violations of the debt collector rise to the level of "unfair or deceptive trade practices." Attorney’s fees may be recovered under this Act, and potentially three times the damages in private actions. Claims filed under the Maryland Consumer Protection Act may proceed in state court even after a bankruptcy discharge.

How Do Federal and State Bankruptcy Protections Interact?

The bankruptcy court enforces federal damages, while the state circuit court can hear claims under the MCDCA and CPA for the same conduct. Maryland courts have held that bankruptcy remedies are not exclusive, thus allowing for parallel actions in federal and state courts. It is wise to coordinate the filings to avoid double recovery while leveraging them during negotiations.

What Are Some of the Most Common Violations by Debt Collectors?

The most commonly-seen debt collector violations following the automatic stay include:

• Wage garnishments continue after a bankruptcy is filed.
• Mortgage servicers continue to send monthly payment reminders in violation of the stay.
• Debt buyers continue calling after receiving the bankruptcy notice.
• Credit reports following the bankruptcy discharge still list debts under active collection.

How to Avoid Debt Collection Efforts Following the Automatic Stay

Although debt collection efforts are supposed to stop immediately upon bankruptcy filing, filers should inform every debt collector in writing immediately after filing, monitor credit reports and mail for prohibited communications, and work with legal counsel to document violations. All post-petition letters, voice mails, and collection logs should be retained.

Contact a Prince George’s County, MD Chapter 7 Bankruptcy Lawyer

If creditors or debt collectors continue contacting you after you file for bankruptcy, you do not have to put up with it. You may be entitled to compensation for stress, lost wages, and even punitive damages. A knowledgeable Montgomery County, MD consumer rights attorney from Bloc One Services, LLC knows how to pursue relief in both federal and state courts, making creditors pay for misconduct. Attorney Blocton provides her community with quality legal services at a fair and reasonable price. "Rebuild Your Future with Hope." Call 240-200-0076 to schedule your free initial 30-minute consultation.