Thomas K. McKnight - Bankruptcy Protection in Tustin, California
What Does Bankruptcy Protection Mean?
When you read a press release about a business or individual filing for bankruptcy, it is common to hear the phrase "... has declared bankruptcy and is reorganizing under bankruptcy protection" or "... has filed for Chapter 7 bankruptcy protection". The term Bankruptcy Protection is used because a bankruptcy filing in a court of law stops all collections activity and legal proceedings relating to debt and financial matters. All bankruptcy filings involving Chapter 7 and Chapter 13 will place an Automatic Stay on the bankruptcy estate.
The automatic stay stops the commencement, enforcement or appeal of actions and judgments, judicial or administrative, against a debtor for the collection of a claim made before the filing of the bankruptcy request. The automatic stay additionally restricts collection actions and proceedings directed toward property of the bankruptcy estate. What does this imply for you? Essentially, a bankruptcy filing applies an automatic stay that will not allow your creditors to move forward with a judgement to collect their debts from your accounts or wages. When you are under bankruptcy protection, all of your assets are protected until the bankruptcy is over. It is a common misunderstanding that if you file for bankruptcy, you will lose everything you own. It is more likely that your assets will be protected under exemptions in the bankruptcy code that allow you to retain things you need to live.
Without bankruptcy protection, your assets can be in danger of being lost to your creditors through lawsuits and judgements. A court of law does not examine your situation before a judgement is determined. You can stop the whole process by letting the courts know that you do not have the resources to pay off all your debts. Filing a bankruptcy is the most effective way to protect your assets and let the courts know that you need to protect the things you own and can not pay the debts you currently owe.
For more information about chapter 7 and chapter 13 bankruptcy, or how to file your bankruptcy in Tustin CA, contact Thomas K McKnight LLP at (800) 466 - 7507 or visit our website at TKMLLP.com for a Free Consultation.