What is Bankruptcy?
“Bankruptcy” allows individuals and certain entities to get permanent relief from many debts and obligations such as credit card bills, loan payments, mortgages, leases, and other contracts, just to name a few. These individuals and entities are called debtors. Bankruptcy allows debtors to wipe the slate clean and get a “fresh start” in their financial affairs. Once a bankruptcy has been concluded, the debtor is discharged from many debts, this means the debtor is no longer legally obligated to pay the discharged debts. You have the opportunity to start over, fresh and new.
Bankruptcy is a way for people or businesses who owe more money than they can pay right now, (a “debtor”), to either work out a plan to repay the money over time, under Chapter 11 12, or 13, or for most of the bills to be wiped out (“discharged”), as in a Chapter 7 case. While the debtor is either working out the plan or the trustee is gathering the available assets to sell, the Bankruptcy Code provides that creditors must stop all collection efforts against the debtor. When the bankruptcy petition is stamped “Relief Ordered” upon filing, you are immediately protected from you creditors.
