Primary Benefits of Filing for Bankruptcy

The primary benefits of filing for bankruptcy protection are four fold.

Upon the filing of a bankruptcy case, creditors are generally barred from commencing or continuing with any/all legal action against you by what is called the "Automatic Stay" of the U.S. Bankruptcy Code. All debt collection including, creditors' telephone calls, car repossessions, mortgage foreclosures and other law suits are stayed, i.e., must immediately stop. All of these actions are usually stopped permanently when the Bankruptcy Court issues its Discharge Order, discharging all dischargeable debts. However, some types of legal action are only stopped temporarily. Only for as long as the debtor(s) bankruptcy case remains open or until the creditor files an Application and successfully procures an Order from the Bankruptcy Court lifting the Automatic Stay. Mr. Alster can tell you which types of actions, if any, may not be permanently stopped from continuing by the Automatic Stay and the prospective Discharge Order to be issued by the Bankruptcy Court. Speak with a Teaneck bankruptcy lawyer at the firm today to learn the primary benefits of filing for bankruptcy.

Most consumer bankruptcy cases successfully end with the issuance of the Bankruptcy Courts Discharge Order, which forever discharges all the debtor(s) dischargeable (general unsecured) debts. The Bankruptcy Court's discharge extinguishes most credit card and medical debts, as well as many other types of general unsecured debt.

Creditors that may have procured a judgment lien(s) against the debtor(s) prior to the filing of the debtor(s) bankruptcy, are usually forever barred from taking any affirmative action to attach the debtor(s) property, garnish the debtor(s) wages or take any other action. This is the case as long as the debtor(s) assets fall within the Bankruptcy Exemptions allowed by the U.S. Bankruptcy Code, which is usually the case.

Available in a reorganization type of bankruptcy only, such as Chapter 13, is a bankruptcy repayment plan will allow debtor(s) to payoff unpaid taxes or mortgage arrearages over a period of up to five (5) years. In a Chapter 13 case, debtor(s) may also be allowed to reclassify a secured creditors debt from secured to completely or practically unsecured, depending on whether there exist any equity in the collateral used to secure the debt, i.e., a second or third mortgage lien on debtor(s) residence may be completely reclassified from secured to completely or practically unsecured, and thereafter discharged at the end of the bankruptcy case when there exist little or no equity in the real property securing the mortgage.

Searching for a lawyer for a bankruptcy case in Hackensack, NJ? To learn more about the benefits of bankruptcy and to get started on the road to a financial freedom contact our Hackensack bankruptcy firm today.