Bankruptcy Protection Lawyer
When you read a press release regarding 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 concerning debt and financial issues. 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 created before the filing of the bankruptcy application. The automatic stay additionally prohibits collection actions and proceedings directed toward property of the bankruptcy estate.
What does this mean for you? Essentially, a bankruptcy filing uses an automatic stay that will not permit your creditors to move forward with a judgement to collect their debts from your accounts or earnings. When you are under bankruptcy protection, each of your assets are protected until the bankruptcy is over.
It is a common misconception that if you declare 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 keep items 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 assess your circumstance before a judgement is decided. You can stop the entire procedure by letting the courts know that you do not have the resources to repay all your debts. Filing a bankruptcy is the most effective way to protect your assets and let the courts know that you have to protect the things you own and can not pay the debts you currently owe.