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How Long Does It Take for Creditors to Get Off My Back After Filing Bankruptcy?

January 21st, 2016 Bankruptcy
filing for bankruptcy in Arkansas

Bankruptcy figures for 2015 have yet to be released, but nearly one million new bankruptcy cases were filed in U.S. courts in 2014. It’s clear that many Americans are looking for a fresh start by seeking relief from their debt. One of the most significant aspects of bankruptcy that consumers ask about is how to stop harassing creditor calls and take control of their finances. If you are trying to manage your debt, but cannot seem to find a way, you should consider filing for bankruptcy in Arkansas.

What Bankruptcy Chapter Should I File?

Although several different types of personal bankruptcy exist, most debtors will pursue either a Chapter 7 or Chapter 13 bankruptcy filing. Both can offer immediate relief for your debt, but they differ significantly in how they potentially resolve your debt.

By filing for Chapter 7 bankruptcy, you are agreeing that certain personal assets may be liquidated in order to pay off a portion of your debt. The remainder of your qualified debt is then discharged by the court. If you are filing for bankruptcy in Arkansas, there are property exemptions you can claim with Chapter 7 bankruptcy, and each individual scenario will determine which assets are eligible for liquidation.

Under a Chapter 13 bankruptcy filing, you are agreeing to a payment plan to repay all or some of your debts under the supervision of the court. Immediate collection activities—such as constant calls from your creditors—will cease, but you will still be responsible for making the payments assigned by the court.

What Is Automatic Stay?

In the cases of both Chapter 7 and Chapter 13, an automatic stay immediately goes into effect when the filing is registered by the court. Once this occurs, most creditors are legally required to cease all collection attempts, including harassing phone calls and overdue bill notices.

For the most common forms of unsecured debt collection, such as credit cards, the creditor is then legally bound to abide by the court’s decision of liquidation under a Chapter 7 filing, or a payment plan under a Chapter 13 filing. Any possible utility disconnections will automatically be prevented for a certain amount of time if you are in danger of shutoff.

Are There Exemptions to the Automatic Stay?

While most common forms of debt collection will be stopped by an automatic say, it is still possible for creditors to appeal to the court for an exemption to continue their activities. However, they must receive legal permission before they recommence any of their previous collection attempts. The automatic stay will also halt any ongoing eviction or foreclosure proceedings, but if a creditor had previously received a judicial ruling against you for eviction or foreclosure, then you may still be at risk.

If you owe back taxes to the IRS, they are still allowed to initiate or continue with an audit, send you a notice of deficiency, or ask for a tax return. They may not, however, issue a tax lien or seize your property while you are under the protection of an automatic stay. Also, if you owe child support payments, you will likely still be responsible for them even after an automatic stay is enacted.

Is Filing for Bankruptcy Right for Me?

If you have questions about filing for bankruptcy in Arkansas, contact Nolan Caddell Reynolds at 866-242-0452 for help determining what is best for your future. We can assist you throughout bankruptcy proceedings to get you protection from harassment by your creditors.

Typically I don’t leave much feedback for services rendered, however, in this particular case I think everyone needs to know about my experience with Caddell Reynolds. I have used various attorneys throughout my adulthood for various reasons. Recently I retained an attorney, Joel Hargis, from this firm. If anybody is just satisfied with meeting expectations you need to consider this firm for exceeding expectations. This attorney and his staff far exceeded any expectations I had at the onset. Tammy was amazing in making me feel comfortable with the various entries and documentation needed. Mandy goes above and beyond in being responsive to questions and needs. An example which has never happened to me before with any law firm, was I sent an email late Saturday night requesting an appointment and information and on Sunday I got a response back. What law firm does that? Never in my experience has that ever happened to me. Joel is absolutely amazing. He doesn’t circumvent the law he explains the law that any novice can understand. He left no doubt in my mind of his knowledge, his experience, his attention to detail, and his overall diligence in making sure that I was going to be represented in a manner that my confidence level in my particular case went up 150%. I very much recommend this law firm and if the rest of their legal team is as good as the one I retained within this firm they will go far in servicing any client that needs representation. Amazing and astounding don’t really define or describe how I feel. One word comes to mind, indescribable!

John T