At what point will a bankruptcy begin to assist a consumer?
Usually, a Bankruptcy will protect a consumer upon the filing date of a Bankruptcy Petition. A Petition for Bankruptcy is filed when a completed petition is presented along with the required filing fee to the Federal Bankruptcy Court in your area. When your Bankruptcy Petition is filed, the Federal Bankruptcy Court mails a notice to your creditors to discontinue collection efforts including harassing phone calls, lawsuits, foreclosure and repossessions.
The filing of a bankruptcy petition in the bankruptcy court initiates an "automatic stay." This stay prevents creditors from taking any action of significance against a debtor. The true benefits come from both this stay and the bankruptcy discharge. These two legal actions combine to alleviate an individual’s debts. In the majority of cases (under Chapter 7), the debtor is able to keep all of his/her property, while at the same time not being required to pay back debt previously owed. There are always exceptions to these rules. For example, student loans, family support payments, and many taxes are not "dischargeable" even after a proper bankruptcy case.
There are potentially downsides to bankruptcy. Some, if not all, people experience a significant hit for a number of years on their credit. However, credit can be strengthened through responsible credit planning. Therefore, a debtor should take the same approach to building credit as one would if they were just starting out with no previous credit history.
Bankruptcy can also have a benefit of making life simpler for those that are under the stress of debt. The decision to contact a bankruptcy attorney and file a bankruptcy petition can be the real starting point for benefit.
If you have further questions on how bankruptcy can help you contact the bankhttp://bankruptcy-sanjose.comtoday at (408) 599-1305.
