One significant advantage of declaring bankruptcy is the protection from creditors. When a person chooses to file for bankruptcy, he or she is usually already behind on payments on the majority of his or her debt. Getting behind on payments has a tendency to snowball—it begins with credit cards or small debt, and if things do not improve, the neglect spreads to car and mortgage payments.
Debt may accumulate for a variety of reasons, including job loss and sickness to the individual or family provider. Many of these reasons are beyond the individual’s control.
When a debtor files for bankruptcy, the act of filing imposes an automatic hold on debt collection. This implies that no debt collector may harass the debtor any longer. A notice is given to all creditors upon filing. If a creditor does not receive or ignores the notification for whatever reason, the debtor should tell the creditor that he or she has filed bankruptcy and all interactions should end. If the debtor has a bankruptcy attorney, contact may be sent to the attorney.
Anyone considering the legal issues surrounding personal or business bankruptcy should start with the free Bankruptcy Worksheet. Alternatively, you can find a bankruptcy lawyer to assist you with credit and bankruptcy legal information, as well as bankruptcy filing.
