What Bankruptcy Can Do for You Part 1by Amy Szilagyi on 06/21/10
Wipe Out Unsecured Debts "unsecured debts" are debts that are not backed by any of your assets. They include things like credit cards, medical debt, personal loans, unpaid utilities, most lawsuit judgments, etc. They do not include things like mortgage loans or car loans. After your bankruptcy is discharged, you have no more liability to your previous unsecured creditors, unless you take on more debt
Stop Collection calls and Collection Actions As soon as your bankruptcy petition is filed, an "automatic stay" goes into effect. That means creditors cannot take any further actions against you. They cannot call you, send you letters, file a lawsuit or anything else. If they do, it is a violation of the "Fair Debt Collections Practices Act" and they may liable for damages. Bankruptcy may also allow you to stop foreclosure on your house and/or reposession of your car.
If you use an attorney, they may let you refer creditors to their office before your bankruptcy petition is filed and maybe even before you pay the entire amount of your legal fees for the bankruptcy.
Stop Wage Garnishments If your wages are being garnished, or if a creditor is threatening to garnish wages to satisfy a court judgment, the automatic stay in bankruptcy will stop the garnishments immediately.
Delay or Stop Utility Disconnections If a utility company (water, electric, gas or telephone) is threatening to turn off your service because of missed payments, bankruptcy can prevent that for at least 120 days.
Check Back Soon for part 2 of this topic.
For more information about Bankruptcy in Holland Michigan, click here.