When you file for bankruptcy an automatic stay order is issued. This order is served to creditors and prohibits them from making further collection attempts on the debt. Under this order, creditors cannot contact you; send you notifications regarding your debt or make attempts to take possession of your assets. The automatic stay order is also able to halt any repossession, wage garnishment or foreclosure proceedings.
While creditors may not like the fact they are restricted from making collection attempts they are required to adhere to the automatic stay, by Federal law. There are instances in which creditors may continue to attempt debt collections. If this happens, you need to notify creditors of your case by sending a copy of your "Notice of Filing Bankruptcy" and contact your bankruptcy attorney right away. Creditors that continue to make collection attempts after receiving these notifications could face penalty fines or more serious consequences.
The protection offered by this order does not apply to all debts. Unpaid child or spousal support payments are not protected under the automatic stay, and are collectible as originally determined. Generally, back taxes and ongoing tax debt obligations are also not protected under this order, and the IRS is free to continue collections as they desire. Student loan debts, pension loan payments and criminal restitution payments are also rarely offered protection under the automatic stay order.
Once your debts have been discharged in bankruptcy your debts have been resolved and, therefore, become non-collectible. However, this isn't to say that some creditors may not try to collect in the future. If your debts are discharged in a Chapter 7 case, the debts eligible for the automatic stay become permanent. This means that these debts cannot legally be pursued again in the future by the creditor. After a Chapter 13 bankruptcy, the automatic stay order becomes permanent and creditors cannot make attempts to collect outside of the terms outlined in the original repayment plan. In other words, any remaining debt that was not repaid according to the Chapter 13 plan becomes non-collectible.
While creditors may not like the fact they are restricted from making collection attempts they are required to adhere to the automatic stay, by Federal law. There are instances in which creditors may continue to attempt debt collections. If this happens, you need to notify creditors of your case by sending a copy of your "Notice of Filing Bankruptcy" and contact your bankruptcy attorney right away. Creditors that continue to make collection attempts after receiving these notifications could face penalty fines or more serious consequences.
The protection offered by this order does not apply to all debts. Unpaid child or spousal support payments are not protected under the automatic stay, and are collectible as originally determined. Generally, back taxes and ongoing tax debt obligations are also not protected under this order, and the IRS is free to continue collections as they desire. Student loan debts, pension loan payments and criminal restitution payments are also rarely offered protection under the automatic stay order.
Once your debts have been discharged in bankruptcy your debts have been resolved and, therefore, become non-collectible. However, this isn't to say that some creditors may not try to collect in the future. If your debts are discharged in a Chapter 7 case, the debts eligible for the automatic stay become permanent. This means that these debts cannot legally be pursued again in the future by the creditor. After a Chapter 13 bankruptcy, the automatic stay order becomes permanent and creditors cannot make attempts to collect outside of the terms outlined in the original repayment plan. In other words, any remaining debt that was not repaid according to the Chapter 13 plan becomes non-collectible.
No comments:
Post a Comment