Bankruptcy May be an Option
Whether a credit card company or debt collection agency has filed a lawsuit against you, bankruptcy may be an option to help you get relief from collection actions of creditors. When bankruptcy is filed, the automatic stay is enforced; meaning collection attempts against you cease until bankruptcy proceedings are completed.
The Automatic Stay Can Help
The automatic stay may help stop certain collection actions against you. Yet, it is important to review which actions are not subject to the automatic stay such as collection attempts for back child or spousal support.
The automatic stay helps give debtors time to sort out their debt situation but it varies depending on which chapter is filed. In Chapter 13 bankruptcy , the stay gives debtors time to develop a solution in repaying debt without pressure from creditors. In Chapter 7 bankruptcy , the stay may lead to debt getting discharged if it qualifies, while providing extended protection for the debtor.
Many lawsuits qualify to be discharged through bankruptcy. For example, lawsuits related to unpaid credit card debt may be discharged. Certain lawsuits may not qualify for discharge in bankruptcy such as lawsuits related to unpaid taxes, student loan debt, or fines & penalties owed. Lawsuits in relation to fraud activity committed by the debtor, luxury items purchased within months of filing bankruptcy, or legal actions against the debtor in relation to personal injury or death from a vehicle accident involving illegal substances may not qualify for discharge.
The automatic stay may be in effect temporarily for certain situations; meaning when it expires the creditor may continue collection attempts.
Considering Bankruptcy? We Can Help
If you are considering bankruptcy but not quite sure, we can help. You can set up a free consultation by giving us a call or filling out our contact form .
(Via: http://bankruptcyma.blogspot.com )