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Filing Chapter 7 Bankruptcy Shares the Benefits of the Automatic Stay

Filing Chapter 7 Bankruptcy Shares the Benefits of the Automatic Stay
"The automatic stay is one of the most potent benefits of Chapter 7 bankruptcy. While all chapters of bankruptcy have access to the automatic stay, Chapter 7 is the most well-known for its application. The majority of individuals file for bankruptcy to get creditors off their backs. The reason for this is the automatic stay. The injunction is so strong that it will halt all collection efforts and any legal action against the debtor. The lengthy list includes halting foreclosure, litigation, judgments, and wage garnishments. If the creditor wishes to communicate with the debtor, they must do so through the bankruptcy attorney.In 2007, when the real estate market crashed, a large number of homeowners sought to avoid foreclosure and retain their homes. Many of these individuals sought assistance from a bankruptcy attorney. Because each individual's circumstance is unique, it is not advisable to file for bankruptcy without consulting an attorney. Generally speaking, Chapter 13 bankruptcy is the best option for homeowners attempting to avoid foreclosure. The viability of Chapter 7 bankruptcy depends significantly on the type of debt incurred by the debtor. In a Chapter 13 bankruptcy, the bankruptcy attorney and client must submit a repayment plan to the court that lasts between three and five years. This permits a person to retain any property they can afford to keep. Similar to Chapter 7, the individual will receive a bankruptcy discharge at the conclusion of Chapter 13 that will clear out any remaining unpaid debts. This is conceivable due to the capability of automatic stay.The automatic stay goes into effect upon the filing of the bankruptcy petition. When preparing the bankruptcy petition, the bankruptcy attorney will request a complete inventory of creditors to be included on the schedules from the client. Some courts require the bankruptcy attorney to provide a floppy disk containing a list of creditors and their current addresses, making it simpler to notify the creditor. Technically, when the bankruptcy petition is filed, the automatic stay enters into effect, halting all collection actions against the debtor. Creditors will be notified of the impending bankruptcy petition within a week or so. If creditors contact the debtor prior to being notified, the debtor need only refer them to their bankruptcy counsel or provide them with the bankruptcy filing number. If creditors have been notified and continue to contact the debtor, they will be in violation of the automatic stay and may face sanctions.
" - https://www.affordablecebu.com/

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"Filing Chapter 7 Bankruptcy Shares the Benefits of the Automatic Stay" was written by Mary under the Finance / Wealth category. It has been read 104 times and generated 0 comments. The article was created on and updated on 31 May 2023.
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