Are you being hounded by creditors over past-due accounts? Does the sound of your phone ringing fill you with dread? If so, it may be time to consider bankruptcy. Bankruptcy offers several protections against debt collectors and creditors related to the bankruptcy process. In this article, the Danville bankruptcy attorney, Chris Arrington, will discuss how bankruptcy can provide protection against creditor and debt collector harassment. 

The Automatic Stay

As soon as you file for bankruptcy, the automatic stay goes into effect. The automatic stay prevents creditors and debt collectors from contacting you or making any efforts to collect a debt. In other words, they’re no longer allowed to call you, file lawsuits, or get judgments against you. All such activity must cease. The automatic stay provides much-needed relief from creditor harassment and allows you the time you need to get your finances in order. 

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also known as liquidation bankruptcy, is a type of bankruptcy that allows you to discharge your debts if you don’t have the means to pay them. At the end of the bankruptcy process, you won’t owe the debts that creditors have been harassing you over any longer. They are discharged during the bankruptcy process. The caveat here is that you must be able to qualify. So long as you make less than the state median in Indiana, you automatically qualify for Chapter 7. If you make more, then you will have to pass what’s known as a means test. The means test determines whether or not you can file a Chapter 7 bankruptcy. If you pass the means test, you can move forward in Chapter 7. If you fail the means test, you will have to file under Chapter 13.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as reorganization bankruptcy, requires you to pay some (but not all) of your debts back on a payment plan created by your bankruptcy lawyer and authorized by the court. The plan is executed over the court of three to five years. During the bankruptcy, you make payments to the bankruptcy trustee, and at the end of the three- or five-year period, your remaining debts are either repaid or discharged. While the bankruptcy is still in process, your creditors may not contact you, file lawsuits against you, or garnish your wages. In these cases, you are protected from the actions of creditors.

Should I File for Bankruptcy to Stop Creditor Harassment?

Creditors can do much more than just harass you. They can sue you. Once they have a judgment against you, they can garnish your wages, levy your bank account, or place a lien on your home. If you’re facing creditor lawsuits, it may be the appropriate time to consider bankruptcy before your wages are garnished or your bank account is levied. 

Talk to a Danville, IN, Bankruptcy Attorney Today

Chris Arrington represents the interests of those facing creditor harassment or creditor lawsuits. Call our office today to schedule an appointment, and we can begin discussing your best moves to get clear of the debt.