BANKRUPTCY

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What is Bankruptcy?

  • Bankruptcy is a legal proceeding where people or entities that cannot repay their debts seek relief from payment of those debts.  
  • The source of bankruptcy law is primarily federal law, found in 11 USC 101, et seq.  
  • State laws also play a part in bankruptcy cases.  
  • In New York, some of the state laws that play a large role in many bankruptcy cases include the Debtor-Creditor Laws, the Civil Practice Laws and Rules, and the General Obligations Law, just to name a few.
  • For many people, the goal of filing a bankruptcy case is to obtain the relief provided by the AUTOMATIC STAY, as well as the power of the DISCHARGE INJUNCTION.

The Power of Bankruptcy Lies In The . . .

AUTOMATIC

STAY

  • The AUTOMATIC STAY operates as a court order that stays the enforcement of collection of many debts.
  • The Automatic Stay is created by law, and is found in 11 USC Section 362.
  • Upon the filing of a bankruptcy petition, an order for relief is entered, and the Automatic Stay goes into effect IMMEDIATELY (unless there is something, such as a prior court order, or other limiting condition).

DISCHARGE INJUNCTION

  • The DISCHARGE INJUNCTION is the order entered at the end of the bankruptcy case which permanently enjoins a creditor from attempting to enforce a debt.
  • The Discharge Injunction is created by law, and is found in the specific chapter of bankruptcy filed (for chapter 7, 11 USC Section 727; for chapter 13, 11 USC Section 1328)
  • The Discharge Injunction applies to ALL CREDITORS, unless the debt is one specifically excluded from discharge by law, or some court order excluding the debt from discharge.

Benefits of Bankruptcy

Stop Wage Garnishment

If you've received a notice of wage garnishment, filing for bankruptcy can stop the garnishment.

Stop Foreclosure

If you're in danger of losing your home in foreclosure, filing for bankruptcy can stay the foreclosure sale.

Stop Bank Levy

If you're received a notice of a bank levy, filing for bankruptcy can stop the execution against your bank account.

Discharge Debts

If you successfully get a discharge in your case, it PERMANENTLY enjoins creditors from attempting to enforce the debt against you.

Stop Repossession

If you're in danger of having a car repossessed, filing for bankruptcy can stop the repossession.

Stop Letter and Phone Calls

Filing for bankruptcy can help reduce all of the anxiety and stress from debt collectors by stopping the incessant letters and phone calls.


Looking for something specific?

If you're looking for something specific related to bankruptcy, check out these blog posts . . .

Claim Your Spot to the Intro to Bankruptcy MasterClass now!

On this value-packed web presentation, you’re going to discover the following:  

  • What is bankruptcy and how it can help you 
  • Get an overview of the bankruptcy case process 
  • What debts can bankruptcy eliminate?  Debts not eliminated? 
  • Whether you can keep property if you file for bankruptcy 
  • Documents you need to put together to file for bankruptcy 

Frequently Asked Questions

Can you keep your car in bankruptcy?

Can I keep a tax return I'm expecting if I file for bankruptcy?

Can filing for bankruptcy stop a foreclosure or garnishment of my wages?

Can you keep a house in bankruptcy?

Can you keep your social security income and other benefits?

How does filing for bankruptcy affect my credit?

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