Umbrella Of Defense
When you file for bankruptcy, a stay order is automatically issued. This order is imposed on creditors and prohibits them from pursuing additional collection efforts. This order prohibits creditors from contacting you, sending you notices regarding your debt, or attempting to seize your assets. Additionally, the automatic stay order can suspend repossession, wage garnishment, and foreclosure proceedings.
Federal law requires creditors to abide by the automatic stay, despite the fact that they may not appreciate being prohibited from pursuing collection efforts. There are situations in which creditors may pursue debt collection efforts. If this occurs, you must immediately submit a copy of your ""Notice of Filing Bankruptcy"" to your creditors and contact your bankruptcy attorney. After obtaining these notifications, creditors who continue to make collection attempts may be subject to fines or more severe consequences.
Not all debts are covered by this order's protection. Unpaid child or spousal support payments are not protected by the automatic stay and are collectible according to the original determination. In general, this order does not protect past taxes and ongoing tax debt obligations, and the IRS is free to continue collection efforts. Student loan debts, pension loan payments, and criminal restitution payments are rarely protected by the automatic stay.
After A Discharge
Once your debts have been discharged in bankruptcy, they are no longer collectible because they have been settled. However, this does not mean that creditors won't attempt to collect in the future. If your debts are discharged in a Chapter 7 proceeding, the automatic stay becomes permanent with respect to the discharged debts. This means that the creditor cannot legally pursue these debts in the future. After a Chapter 13 bankruptcy, the automatic stay becomes permanent and creditors are prohibited from attempting to collect outside the terms of the original repayment plan. In other words, any debt not reimbursed in accordance with the Chapter 13 plan becomes uncollectible.""
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