Castle Law Office Blog | Missouri & Illinois Bankruptcy Legal Blog

Bankruptcy Law Can Stop Creditor From Arresting You To Collect a Debt

I just finished reading an interesting article being reported on MSNBC about a St. Louis Bankruptcy Judge that ordered a small business owner to re-pay money to a person that was convicted of stealing from him prior to the bankruptcy filing.  It appears that the small business owner, Mark Paveromo, continued to pursue criminal chares against Mark Koch even after the bankruptcy was filed and Mr. Koch was arrested.

Judge Charles Rendlen from the U.S. Bankruptcy Court for the Eastern District of Missouri ruled that Poveromo intentionally violated the bankruptcy stay on claims by causing Koch's arrest to collect on the debt.  Judge Rendlen stated "Allowing a creditor to use the threat of incarceration on charges related to a prepetition debt undermines the most fundamental premise of bankruptcy law: the guarantee of equal treatment among creditors pursuant to the bankruptcy code."

Rendlen ordered Poveromo to pay back the restitution Koch had given him as well as attorney's fees and costs.

I think his opinion is a very powerful reminder of the protection the bankruptcy law can give to average consumers that are harrassed by bill collectors and, especially payday loan companies who love to use the threat of criminal prosecution to collect a debt.  Filing for chapter 7 bankruptcy or chapter 13 bankruptcy should give you the peace of mind to get the debt relief you deserve without the worry of going to jail.  The automatic stay provisions of the bankruptcy law, otherwise known as 11 U.S. C. §362, stop a creditor from any action to collect a debt that was incurred prior to filing bankruptcy. 

You can read more on this story by visiting the news section of my website and clicking on the article "Why Criminal Charges Can Be Stopped By Filing Bankruptcy in St. Louis, Missouri."