How Does Bankruptcy Protect Me From Creditors?

When filing bankruptcy, something that many people are curious about are the ways in which the bankruptcy process will protect them from creditors.  Related to this, many also wonder when these protections take effect, and how they will continue to function after the bankruptcy has formally concluded.  These are both excellent questions, and they both address one of the fundamental, foundational purposes of bankruptcy, which is: to provide you, your family and your loved ones with peace of mind concerning debt, creditors, and their efforts to pursue those debts.  

This is accomplished in a variety of different ways.  The first is that filing a bankruptcy inherently triggers a mechanism called the “automatic stay”, a broad legal framework that shields those in the bankruptcy process from most forms of collection on debts that were owed pre-filing.  The protections offered by the automatic stay include, but are not limited to, preventing creditors from billing or calling you; preventing creditors from suing you to collect on a debt that was owed prior to the bankruptcy being filed; preventing creditors from garnishing your wages or bank account, and preventing creditors from forcing you to continue making automatic payments if an ACH or automatic withdrawal was previously set up to make payments on the debt.

The automatic stay remains in effect until the bankruptcy discharge occurs, which is when the debts being discharged through the bankruptcy are permanently resolved.  When this discharge occurs, it permanently eliminates all personal obligations on the debts being addressed for the person, or people, who have filed bankruptcy.  Following the discharge, creditors will be permanently prohibited from attempting to collect on any of the discharged debts, and these debts will cease to negatively impact your credit score moving forwards.

Bankruptcy can provide assistance to anyone dealing with unmanageable debt in a broad variety of different ways, but first and foremost it exists as a tool to provide peace of mind to those pursuing through the process.  When a bankruptcy is filed, it immediately protects the filer by prohibiting collection on the vast majority of debts, and in the long term it also protects you from these debts by eliminating any personal obligation that you had on them at the time of filing through the process of the bankruptcy discharge.  Our firm has extensive experience in assisting people as they pursue the bankruptcy process, and we are here to act as a resource to ensure that they fully experience the peace of mind that it brings.

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When the time is right, or when you are ready, please don’t hesitate to reach out to Minnesota’s most kind and helpful bankruptcy law firm by going now to www.lifebacklaw.com.