What Is A Bankruptcy?

Bankruptcy is a federal process that allows a person or an entity to have their debts forgiven.  In order to have debts forgiven the person or entity must qualify under the bankruptcy rules and guidelines.  The lawmakers realized a long time ago that no one is perfect and that even the most prudent individual could acquire debt that was beyond their ability to repay.  We often see the inability to repay loans in cases of medical bills or where a person was making a good income which supported their bills, but for one reason or another the income decreased or ended altogether, but their bills didn’t.

Most people have heard of the “automatic stay” that goes into effect after a person files for bankruptcy. The automatic stay prevents creditors from trying to collect any debt from the person or entity who has filed for bankruptcy. As a result of the automatic stay creditor phone calls, collection letters, wage garnishments, lawsuits, bank levies, and all other types of harassment, intimidation and scare tactics by creditors usually stop immediately.  We say usually because there are a few unethical collectors that will try to ignore the automatic stay, but when you hire an attorney to file bankruptcy they will take care of these unethical collectors for you.

When you have completed the bankruptcy process you will receive discharge information from the Bankruptcy Court.  This lets you know that the bankruptcy process is completed and that you have been legally released from the debts you claimed in your bankruptcy.

The two most common types of bankruptcies a consumer will file for are Chapter 7 and Chapter 13.  Most people seeking to file bankruptcy want a complete discharge of all their debts which can be accomplished through a Chapter 7 if the debtor meets the means test necessary to qualify for a Chapter 7.  If a debtor does not qualify for a Chapter 7 they may qualify for a Chapter 13 which is basically a federal debt repayment and debt write-off plan that allows the debtor to rearrange their finances and repay a portion of their debts.

At the Law Office of Margaret D. Wilson we limit our bankruptcy practice to filing and representing clients in Chapter 7 and Chapter 13 consumer bankruptcies only.

If you are looking for an attorney that is sensible and effective then call us today for a free one time 30 minute attorney consultation at 818-435-4149.