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.