Filing for bankruptcy can be a hard decision to make. People may not want to do so because of the bad stigma surrounding the process. However, it can be beneficial for individuals who are facing a financial crisis. During the bankruptcy process, the automatic stay is a useful tool. This tool bars creditors from contacting debtors. This gives debtors the space they need to work with their attorneys to make plans on how to proceed with the bankruptcy process. After filing out the necessary paperwork for bankruptcy and filing it, the automatic stay will go into effect automatically. This can help alleviate the stress that individuals are feeling since they can no longer be harassed by creditors.
The automatic stay is involved in Chapter 7 bankruptcy and Chapter 13 bankruptcy proceedings. These processes are used by individuals to reorganize their debt and prepare their finances for the future. Through these processes, individuals can create a better system for their finances. The automatic stay has been seen as one of the most beneficial parts of these processes.
What happens after?
Once the automatic stay goes into effect, the individual continues with the bankruptcy process. For Chapter 7 bankruptcy, liquidation will occur. All non-exempt assets will be liquidated to pay back creditors as much money as possible to eliminate some of the debt you owe. This can help to cover the debt although it may not be able to meet up to the amount that you owe. It can still erase debt. Chapter 13 bankruptcy functions differently than Chapter 7 bankruptcy because it involves making a repayment plan. Individuals can work with a professional attorney to come up with a repayment plan. This repayment plan can help to fix their financial situation and prepare for a better future. Through this process, individuals are allowed to keep their possessions while still paying back their creditors. They must attend the bankruptcy court to get the repayment plan approved. Then it will be set in motion and depending on the plan, it will take a designated amount of time to pay off. During this process, you can acquire the help of a bankruptcy attorney to learn more.
Matters related to bankruptcy and estate planning are very significant in one’s life and require the services of an experienced attorney. Our firm proudly serves clients throughout Rockland County and New York State. If you need effective legal guidance, contact Koplen Law today to schedule a consultation.