AFTER THE BANKRUPTCY PETITION HAS BEEN FILED

Once the bankruptcy has been filed, and any litigation against you has been stayed, you can breathe a sigh of relief. For the first time in a long time, you will not owe any money other than the payments under the Chapter 13 Plan. There will be no more harassing telephone calls, no more threatening collection letters, and no more multicolored mail from the creditors.

You can now start a new financial life! Many debtors are surprised, and relieved, to learn that even though your bankruptcy will appear on your credit record for some time, you will be able to obtain new credit and even mortgage loans! The rationale for this seems to be that, if you filed under Chapter 13, prospective creditors know that you've successfully completed a bankruptcy plan and are willing and able to repay your debts over time. However, prospective creditors know that you can only file a Chapter 7 bankruptcy once every seven years; therefore, any credit extended to you will be repaid. Whether you filed under Chapter 13 or Chapter 7, prospective creditors view the debtor as better credit risk than you they were prior to filing for bankruptcy. A person who files for bankruptcy is a better credit risk than a similar individual who has not filed for bankruptcy, but who has a terrible credit report, and many charge offs on their credit report.

Mr. Sliwinski, Esq. fully understands all of your other concerns about filing for bankruptcy, your ability to obtain credit cards, and mortgages in the future is very important to you. However, he strongly believes that a debtor will find that the "fresh start" that bankruptcy offers can enable a person to reestablish a good credit rating very shortly after filing for bankruptcy. Many people who have filed for bankruptcy are shocked when they receive pre-approved credit cards and mortgage offers in their mailboxes only months after they have received their discharge. Bankruptcy is a beginning, and it is not the end!

THE AUTOMATIC STAY PROVISIONS OF THE UNITED STATES BANKRUPTCY CODE

Most, if not all debtors are relieved to learn that immediately upon filing their bankruptcy petition, their creditors are stopped from taking any further action against them. All harassing telephone calls, threatening letters, garnishments, and frozen bank accounts, must be stopped. The automatic stay provision of the United States Bankruptcy Code command all creditors from stopping any and all efforts to collect their debts.

This protection, which appears at Section 362(d) of the Code, gives the debtor much-needed relief from the financial pressure and emotional stress that they face from dealing with creditors. If a creditor violates the automatic stay, and if they still try to collect their debts and harass the debtor, then they can be sued, and be sanctioned by the court. Perhaps the single most important aspect of the automatic stay is that all civil litigation against a debtor must stop once the bankruptcy is filed. Therefore, all wage executions must stop. Most importantly, the automatic stay immediately stops all foreclosure cases. If a debtor’s home is in foreclosure, then they must file for a Chapter 13, if they intend to try to save the home. If the debtor wants to abandon the home, and wipe out the debt on the mortgage, then they can file a Chapter 7.

Additionally, if your bank account has been frozen, the automatic stay law will force the bank to re-open your account. You will be able to safely resume direct-deposit of your salary into your account without any threat of your creditors seizing funds overnight. There are a exceptions to the automatic stay provisions. However, there may come a time after your petition is filed when a creditor moves before the United States Bankruptcy Court for relief from the automatic stay. This is known as requesting “Stay Relief.” The creditor may try to request that the car be returned. This motion is usually denied, however, the debtor must prove that the car has adequate insurance. Moreover, in complicated chapter 13 cases, sometimes the creditor will try to vacate the stay, and argue that the foreclosure case must not be stopped. When this happens, Theodore Sliwinski, Esq. will be needed to assist you to protect your home and car.

Articles

Chapter 7 - Getting a fresh start.

 Chapter 13

Tragic misconceptions about bankruptcy.

17 Debts that might not be discharged in your bankruptcy.

13 Rules you must know before filing bankruptcy.

 Stopping creditors

 Immediate relief after the bankruptcy petition has been filed.

Foreclosure of your mortgage.

 Life after bankruptcy.