Filing for Chapter 7 bankruptcy can be a great idea if you really need a fresh start financially. Chapter 7 offers a variety of benefits, including the ability to get your debts discharged. When you file, your lawyer will explain the process to you. This explanation will probably include these two factors relating to your creditors.
An Automatic Stay Will Kick In When You File
One of the huge benefits you will receive as soon as your attorney files your bankruptcy papers is something called an automatic stay. An automatic stay is a legal tool that prohibits creditors from contacting you during bankruptcy proceedings. This tool is not something your lawyer must request; it just automatically occurs as soon as the documents are filed. It may take a few days for this to occur though.
After your lawyer files your paperwork, the bankruptcy court will receive it and must have time to notify your creditors about this. Once they are notified, they will not be allowed to call you, send you letters, or communicate with you in any other way.
The automatic stay does not only stop your creditors from contacting you, but it also offers another huge benefit. An automatic stay forces your creditors to stop all actions against you. If your mortgage lender is in the process of foreclosing on your house, this process will stop. If your car is about to get repossessed, your car lender must stop this process. It can also stop things such as the following:
An automatic stay is quite helpful when creditors are harassing you for money, and it will probably bring you some relief once you file.
Your Creditors Have The Right To Object
The second thing you should know is that your creditors are required to stop contacting you; however, they also have the right to object to the discharge of the debt you owe. When the bankruptcy trustee notifies your creditors of your bankruptcy filing, creditors will have a certain amount of time to object.
They can do this by attending the meeting of the creditors, which takes place between 21 to 40 days after you file. Another way they can object is by writing a complaint letter to the trustee. There are several common reasons creditors will object, which include:
If a creditor is successful with this objection, the debt will not be discharged through your bankruptcy. This will not affect any of the other balances you owe to other creditors though.
If you would like to learn more about how bankruptcy could help you through a difficult financial time in your life, contact an attorney, such as those at http://timgeorgelaw.com, that specializes in Chapter 7 bankruptcy.
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