If you have already been sued by a creditor or your lender has already accelerated the note and intends to foreclose it might be too late to negotiate. At any moment your home might be sold, wages might be garnished, or bank accounts might be levied. Consider filing bankruptcy to immediately stop your lenders and creditors from any further collection activities. Don’t run the risk of waiting until it’s too late.
Upon filing a bankruptcy petition, the debtor obtains an immediate, automatic stay against most creditor action, which means creditors are barred from pursuing or continuing with collection and enforcement actions against the debtor. The automatic stay provides relief from the embarrassment and harassment accompanying wage garnishments, execution, foreclosure and similar legal proceedings
Specifically, filing Bankruptcy has the potential to provide immediate relief to you in the following ways:
Stopping levies, wage garnishment, repossession, foreclosure due to automatic stay being triggered against creditors.
Stopping creditors from obtaining appointment of a receiver or taking other steps to repossess collateral.
Halting the accrual of interest on unsecured or undersecured claims.
To recover property transferred within the avoidance period.
To accelerate the “cleavage date” for property acquired before and after the bankruptcy date, where generally after-acquired assets are protected from the claims of creditors that existed pre-filing.
Certain property (inheritances, life insurance benefits, and proceeds of a marital settlement agreement) received more than 180 days after filing bankruptcy is free and clear of creditor claims. Such property received within 180 days of filing becomes estate property.
(g) To assume and assign an unexpired nonresidential real property lease, even if debtor is in default, but must file before three-day notice to pay or quit is served and expired.
To ensure that you receive the full protection allowed by the Federal Bankruptcy Code your attorney, will provide creditors with both actual and constructive notice of the filing. If foreclosure is imminent, either go to the location of the trustee sale with a stamped copy of the petition or fax a copy to the foreclosure trustee’s office and get verbal confirmation of receipt. You should also retain record proof that actual notice was given.
(An exception to the automatic stay is the eviction of a tenant if a creditor obtained a judgment in an unlawful detainer action before the bankruptcy filing unless the debtor can cure.)
Automatic stay is in effect as to the debtor until discharge is entered. (Discharge is an injunction itself ordering creditors to make no attempt to collect the debt forever.) Automatic stay is in effect as to the property of the estate until the property is no longer property of the estate – when it is abandoned by the trustee or the case is closed.
Hiring an attorney is the most effective way to file. However, if you are eligible for a Ch 7 and truly cannot afford attorney’s fees, you may represent yourself as a pro se or in pro per debtor and are able to self-file and use free legal aid resources such as Public Counsel to obtain the information, forms, and advice you need.
A meeting of creditors (commonly referred to as a “section 341(a) meeting”) must be held within a reasonable time after the filing of a bankruptcy case and the debtor is required to appear and submit to examination under oath by the creditors,, a trustee or examiner, and the U.S. Trustee. Debtor’s obligation to be available for examination is a “tradeoff” for the protection granted by the automatic stay against creditor action. The purpose is to facilitate protection and administration of the estate for the creditors’ benefit without delay. The scope of examination is very broad and may relate to acts, conduct or property of the debtor or to any matter that may affect administration of the debtor’s estate or the debtor’s right to discharge.
The debtor risks sanctions for failure to appear or answer questions at the meeting. The failure could give rise to a contempt proceeding and/or denial of discharge, and may even result in dismissal of the bankruptcy case.
Vokshori Law Group provides Bankruptcy assistance to individuals and businesses serving the entire Los Angeles County.
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