Bankruptcy Protection And Your Creditors: What You Should Know

Bankruptcy Attorney Dayton, Oh


Bankruptcy can offer significant protection from creditors, but there are some things you should know before you file bankruptcy. It is important to know how bankruptcy protection works and how filing for bankruptcy can offer protection from creditors.




As soon as a bankruptcy petition is filed with the bankruptcy court then something called an automatic stay immediately goes into effect. The automatic stay prevents any creditors from trying to collect on any debts that you owe until you have time to think straight and the bankruptcy judge can review your case.




When you owe debts then creditor actions may seem to be constant. The phone calls and letters demanding payment never seem to end, making it hard for you to think clearly or formulate a plan of action. The automatic stay prevents creditors from contacting you or attempting to collect on a debt unless the bankruptcy judge lifts the stay for the specific creditor. This will give you some time and a little breathing room so you can make sound and informed decisions about your finances and debts.




Creditors who violate the automatic stay in place after you file for bankruptcy can be punished by the bankruptcy court, because the automatic stay is an order from this court staying any and all creditor actions until the case is heard and resolved. The stay will stop most lawsuits, evictions, wage garnishments, foreclosure proceedings, IRS efforts to collect any back taxes owed, and even to prevent any utility service disconnections or the elimination of utility services.




There are some debts that may not be affected by the automatic stay that comes into place when you file for bankruptcy protection. Child support, alimony, certain types of back due taxes, and sometimes any legal judgment resulting from any criminal activities.




An experienced bankruptcy lawyer can examine your debt and determine just how bankruptcy can help with your unique financial and debt situation. If you do not meet all of the deadlines set by the bankruptcy court then this could cause you to lose the protection that the automatic stay offers. This loss of protection can also happen if you do not inform any secured creditors that you have that you intend to file for bankruptcy protection.




Bankruptcy is a very complex process, and it is always wise to hire an experienced bankruptcy lawyer who clearly understands the required process and is extremely knowledgeable in this area of law. Any errors or mistakes, even small ones, could cost you the protection that the automatic stay grants. If creditors make an attempt to contact you after you have filed for bankruptcy then you should provide this information to the bankruptcy lawyer that you have retained.




When you file for bankruptcy protection and you have a qualified bankruptcy attorney then your creditors will receive a notice by mail declaring your intent to declare bankruptcy. This notice will also outline the automatic stay in effect. Your creditors are also given notice of the Meeting of the Creditors, and they may attend in some cases.


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