Debtors looking for relief from constant phone calls and mailings from
bill collectors may wonder about how bankruptcy protection works. You
may see and hear advertisements on the television and radio about using
bankruptcy to stop bill collection activity, but many may not understand
how the process works or even realize they may qualify to obtain such
protection.
When you file bankruptcy an injunction known as the automatic stay goes
into effect. Debt collection attempts come to a halt. The action can
stop foreclosure proceeding,
stop repossession, and even cease legal activity against you such as wage garnishment and
pending lawsuits.
Debt collectors are prohibited from continuing collection attempts against
debtors. They would need to go to court to get permission to continue
such as against you. If they continue without permission they could suffer
repercussions since it would be considered breaking federal code. This
means if you continue to receive phone calls or letters from creditors,
make note of the activity and present it to your bankruptcy attorney.
If you qualify you can have unsecured debt such as
medical bills, personal loans, and credit card debt discharged or eliminated. You will
not be responsible for paying them and creditors cannot continue to collect
on them once the court has discharged them. Creditors can face serious
penalties for trying to collect from debtors in bankruptcy, and even after
their case is closed. If you are struggling or overwhelmed with debt obligations,
consider discussing your situation with a Dallas / Fort Worth bankruptcy
lawyer to review your options.
Reference:
http://www.totalbankruptcy.com/automatic-stay/default