What Your Creditors Don’t Want You to Know About Filing Bankruptcy

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Contrary to what many people assume, bankruptcy is far from a mark of embarrassment or humiliation. The reality is that bankruptcy enables hardworking people to alleviate their financial condition by discharging or restructuring insurmountable debts. In most cases, those who file bankruptcy are not crooks or gamblers, but honest people who simply made one or two financial mistakes. As we see in the recent statistics on bankruptcy filings, these kinds of financial missteps can literally happen to anyone. One reason why people don’t file for bankruptcy is because they don’t know enough about the process itself. Here are a few things that creditors don’t want potential filers to know about.

Filers Receive an Automatic Stay

When you file bankruptcy, you will receive an “automatic stay,” which basically means that your creditors must temporarily freeze their efforts to collect your debts while the bankruptcy process is underway. This automatic stay applies to all debts, even those which aren’t eligible to be discharged under normal circumstances, such as student loans.

Although your creditors can restart their efforts to collect debts in the event that your bankruptcy discharge isn’t successful, you will always have this temporary stay, and so filing for bankruptcy…