In bankruptcy there are so many different factors involved in this article we are going to look at what relief you can get from creditors while you’re in bankruptcy. In previous article we’ve talked about all the steps that you can take before bankruptcy. But to truly get rid of the debt that’s attached to these creditors that are either writing you or calling you or harassing you, the first step you take is to file bankruptcy. The relief that you get in bankruptcy is called the automatic stay. Once you have filed bankruptcy, the automatic stay kicks in. That means simply that all collection activity on behalf of all creditors has to stop. so if I’m in a law suit and I’m being sued by my creditor and am worried about a judgment, that creditor, once I’ve filed, cannot obtain a judgment against me. If I have a garnishment going on, that garnishment must stop immediately. A lot of lawyers and court administration attorneys, judges, will refer to the automatic stay as an umbrella. So the umbrella essentially opens when the debtor files. The umbrella protects the individual who’s filed. Now it’s complete protection with regards to the debtor. However, the creditor can still come into the bankruptcy, they can ask questions about your assets, and, if you have debt that’s collateralized by a piece of property or a car and you haven’t been paying on it, they can ask for it back. For example, say I am in foreclosure and I need to stay in my house and am not prepared to move. I have a lot of other debt that’s giving me some problems. I will file bankruptcy, and that will stop the foreclosure as long as my bankruptcy is going on. But once the bankruptcy is completed, the creditor once again has the right to take the house back. So a lot of people who need time to move, to find another place to live, but yet needs to stop their foreclosure, chapter 7 is a very good tool for that. So chapter 7 in the same instanceâ€say, for example, I’ve got a vehicle and I just don’t have the ability to pay it. I know they’re going to come and repossess it. But I need to drive that car around for a few more months until I can find something else to replace it. I can file bankruptcy. I retain the car for as long as my bankruptcy goes on. Typically, it’s about four to five months in Arizona. Then once my bankruptcy is completed, I have an obligation to return the car back to the creditor. Now in both instances I don’t have to pay the mortgage debt. It goes away in the bankruptcy and the same with the car debt. That loan goes away. It’s discharged in the bankruptcy. That’s really a lot of things that the automatic stay can do. You can stop a garnishment. With a garnishment, not only in a chapter 7 do you stop the garnishment, but the debt that was attached to it also goes away. Mortgage debtâ€same thing. But, of course, the house goes back. The same thing with a loan on a car. The loan debt goes away and Of course, you have to return the car back. But you could still use those two items--that car or that house--while you’re in your bankruptcy. So for a lot of people the automatic stay not only gets rid of all those collection calls that we’ve been talking about, it gets rid of the debt attached to it, stops the harassment, and gives a lot of people peace of mind and gets rid all the debt that’s attached to all of those creditors. So that’s what you can expect. That’s the ultimate relief from creditors. If that’s what you’re looking for, to stop those phone calls, to stop those judgments, those law suits, those garnishments, really consider a bankruptcy. That will get rid of all of that.
Please Rate this Article 5 out of 54 out of 53 out of 52 out of 51 out of 5
Not yet Rated
