One of the major benefits of filing for Chapter 7 Bankruptcy, is that most collections are automatically stayed. This means that creditors are automatically and immediately prevented from pursuing any further action, which includes:

  1. Any current or pending lawsuits
  2. Wage garnishments
  3. Even telephone calls demanding payment

Additionally, after filing, usually within 20-40 days, bankruptcy trustee schedules a meeting between debtor and creditors. At the meeting,

  1. The creditors can ask the debtor questions regarding their debt
  2. The trustee explains to the debtor what a discharge would mean to their credit rating

If the bankruptcy is approved by the court, the debtor is released from personal liability for the debts. Creditors are prohibited from taking any further collection action against the debtor.

Because a Chapter 7 discharge is subject to some exceptions, bankruptcy courts recommend consulting competent legal counsel prior to filing, in order to fully discuss the scope of the discharge.  If you are beginning to consider filing, contact an experienced Chapter 7 Bankruptcy Attorney today, and learn more about how to get started.