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How Bankruptcy Court Stops your Creditors
When you file for bankruptcy, your claim is filed with the Bankruptcy court. This court will determine whether you are eligible to file, oversee the proceedings, and make a final decision on whether you can discharge your debts. However, the Bankruptcy court also offers you powerful protections against your creditors.
Once you file for bankruptcy, the Bankruptcy court issues what is known as an automatic stay. This stay immediately stops any action against you or your property taken by your creditors.
The automatic stay not only keeps the creditors and bill collectors at bay, but also offers you other protections. The bankruptcy stay will temporarily stop any foreclosure proceedings against you. It also prevents any utility disconnections for at least 20 days. Another benefit is that stays stop any wage garnishments, where money is taken from your paycheck even before you receive it.
It is very important that you hire a qualified bankruptcy attorney to represent you during this process. Bankruptcy law is very confusing, and if you do not take the proper actions or submit the right paperwork, the judge may dismiss your case. Once that happens, the automatic stay is lifted, and you are once again at the mercy of your creditors.
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