If you’re like most people who are thinking about bankruptcy, you have creditors breathing down your neck. Your phone is ringing constantly, and your mailbox is full of demand letters. If things have gotten beyond the manageable state, some of your creditors have gotten judgment and your paycheck is being garnished.
Bankruptcy can stop all of that. The moment your attorney files your Chapter 7 or Chapter 13 bankruptcy petition, you are under bankruptcy protection. The Bankruptcy Code provides for a protective order that “stays” all collection action immediately. What that means is that your creditors must stop calling you, your family members, or your employer. If they have sued you, they must stop the lawsuit. If they are garnishing you, they must stop immediately. You probably won’t get back any money they’ve gotten already, but you won’t have 25% of your take home pay taken anymore.
What this also means is that simply paying your bankruptcy attorney part or all of her fees will not put you under bankruptcy protection. Until your attorney files your petition (which means that you have reviewed and signed it), your creditors will still be able to call you and garnish your paycheck.
Bankruptcy offers you the chance at a new start while offering you legal protection from your creditors. Filing bankruptcy doesn’t mean that you will lose all of your property, or even some of your property. In fact, most of my clients keep all of their property, including their cars and their homes. (Of course I have to insert some lawyer weasel words here, which are that I can’t guarantee that you will be able to keep all of your property. Every case is different, and I won’t be able to give you an opinion until I have thoroughly analyzed your particular situation.)
If you are thinking about bankruptcy, schedule a consultation with an attorney to see if it’s your best option.
