When you decide to file bankruptcy, you are still responsible for making payments on your debts until your case is filed. This is because until the case is filed and the automatic stay is in place, your lenders are allowed to contact you and ask for payment. However, this does not mean that you have to make payments, and if you are not able to do so you are probably safe from collection efforts if they have not yet begun, for a short while. The key here is to get your case on file as quickly as possible, because a lender can initiate a collection lawsuit against you until bankruptcy is filed. But, because legal proceedings take a bit of time, if you file soon you can probably avoid a judgment being taken against you. This is important because once a judgment is entered, most lenders move quickly to enforce the judgment.
Enforcement of a judgment can be by wage garnishment, repossession of personal property, or sale of your home in a foreclosure case. But, the instant bankruptcy is filed all of those actions have to come to a stop. The automatic stay will be in place right away when you file a bankruptcy case and here are some of the things that your creditors cannot do once the stay is in place:
• Initiate or maintain an action to collect a debt, including leaving wage or bank garnishments in place. Once your bankruptcy case is filed, if there is a pending garnishment, it must be immediately withdrawn.
• Initiate or maintain an action to repossess personal property. So, if you are in danger of having the repo guy pick up your car, once you file bankruptcy, those repo efforts have to stop.
• Initiate or maintain an action to foreclose on your home. If you are in foreclosure when you file bankruptcy, the foreclosure has to stop and this can save your family from having to move out of your family house.
So while you do not have to keep making payments if you are contemplating filing bankruptcy, you do run the risk of having an action initiated or maintained against you up until the point you either make the required payment or file for the protection of bankruptcy. We understand the timing can be hard to get just right, especially when finances are in turmoil, so work hard to keep your lenders off of your back while you act fast to get a case filed. If you are having trouble making ends meet, call us to find out what you can do to stop the calls and lawsuits.
For more information about bankruptcy, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.