The Protection given to you in Bankruptcy
One of the most beneficial aspects of filing a bankruptcy case is the “Automatic Stay,” a federal law in the United States Bankruptcy Code that protects you from the moment you file a bankruptcy case.
In my office, we would prepare a lengthy number of documents for you to file a bankruptcy case. After you sign those documents we email those to the bankruptcy court and you have filed a case. You will have a bankruptcy case number; and at that point you and your possessions are protected by federal law; which is backed up by a federal court.
Creditors are prohibited from taking any action to collect a debt from you.
They are prohibited from filing or continuing lawsuits.
They are prohibited from repossessing anything.
They are prohibited from initiating or concluding any foreclosure sale.
Letters and phone calls have to stop.
Outside of enforcing child support orders and criminal court proceedings everything other debt collection action is required to stop. If someone violates the Automatic Stay they can be punished by the bankruptcy court.
From the time you are in bankruptcy your creditors can not take action against you. At the end of case you receive an Order of Discharge. An Order of Discharge is a permanent injunction to your creditors ordering them to never try to collect your debt again. If your debt is discharged in bankruptcy you have a court ordered injunction to protect you from that debt forever. This can also be enforced in the Bankruptcy Court by way of Contempt of Court proceedings against the creditor.
As a result, we see very few intentional attempts collect a debt that a creditor knows has been discharged. If it happens to you, call us right away!