“One of the biggest benefits to filing for bankruptcy is the fact that the debtor gains certain protections under bankruptcy law. This can help protect a person’s car, house, paycheck, and even their sanity,” says Bert Briones, an Irvine bankruptcy attorney.
Filing for bankruptcy protects a person’s assets by keeping creditors from being able to seize them. Chapter 13 bankruptcy does this by restructuring debt and creating a three-to-five-year-long repayment agreement that both debtor and creditors must adhere to.
Chapter 7 bankruptcy does this by eliminating debt by selling off some assets in order to pay it off. Though chapter 7 causes debtors to lose some of their assets, it protects their other ones, like their homes.
In certain situations, some creditors can garnish a person’s wages in order to repay their debt. Though this usually doesn’t impact things like welfare or social security payments, some debtors may need to take extra steps to protect these forms of income, as well. Filing for bankruptcy can stop wage garnishment in its tracks, allowing debtors to keep their entire paychecks instead of losing them to creditors.
Once a person files for bankruptcy, creditors are subject to a restraining order that prevents them from continually harassing that person. Though there are laws that determine what creditors are and are not allowed to do or say when contacting debtors, a lot of them don’t abide by these laws very well, and many debtors are still subject to undue harassment from unscrupulous collection agencies.
Filing for bankruptcy makes it contempt of a federal restraining order for creditors to continue to contact the filer. This makes it a very attractive option for people whose daily lives are being negatively impacted by the amount of phone calls and letters they receive from their creditors.
When it comes down to it, bankruptcy helps both debtors and creditors. It helps creditors by getting them their money, and helps debtors by protecting them from harassment, wage garnishment, and having their assets seized. Though the decision to file for bankruptcy is a serious one that has long term impact on a debtor’s credit history, it is ultimately beneficial for the people who have a lot to lose.
If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced Orange County bankruptcy lawyer.
We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.
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