1. What is Bankruptcy?

Bankruptcy is a legal process through which the person filing for bankruptcy (the debtor) seeks two goals: protection of his property and discharge of his debts.

The debtor receives protection of his property as soon as he or she files bankruptcy. The moment a bankruptcy petition is filed a federal law called the “automatic stay” goes into effect to protect the debtor from his creditors.

The automatic stay protects the debtor from most types of creditor actions against the debtor’s property. For example the automatic stay prevents creditors from repossessing a debtor’s car, foreclosing on his house, garnishing his wages or levying his bank account. It also prevents creditors from calling or writing to the debtor to demand payment.

The second goal of most bankruptcies besides protection of the debtor’s property, is erasure or discharge of the debtor’s debts. Unlike the automatic stay which happens automatically as soon as debtor files for bankruptcy, debtors do not receive a discharge of their debts when they file. The process of receiving a discharge only happens at the end of the bankruptcy process. This process will take three months in a chapter 7 bankruptcy and will take three to five years in a chapter 13 bankruptcy. Not all types of debts are able to be discharged, but most are.

If you have questions about bankruptcy, call Evan Livingstone at (707) 526-4600 English or (707) 206-6570 Spanish. Email me at evanmlivingstone@gmail.com. Or visit my bankruptcy website at helpbk.com.

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