What will happen to my creditors if I file for bankruptcy?

If you file for bankruptcy in Massachusetts, your creditors cannot try to collect money from you to repay your debts. Instead, your creditors must file a claim in the bankruptcy court and they will be paid from the money left in your bankruptcy estate. Depending on the type of bankruptcy you file, some debts are discharged and your creditors will not receive any payment for those debts. In a Chapter 7 bankruptcy, your creditors will get some or all of their money from the assets in your estate. In a Chapter 13 bankruptcy, your creditors will receive a payment plan based on your income and assets. You will need to file a "petition" with the bankruptcy court specifying which debts you would like to pay and which debts you would like to be discharged. Your creditors will then be notified that you have filed for bankruptcy and the court will issue an "automatic stay" which will prevent your creditors from trying to collect payments from you. Your creditors may choose to challenge your bankruptcy filing in court, and if they are successful, they may be able to receive some of the money owed to them. It is important to discuss the implications of bankruptcy with an experienced attorney to determine the best course of action for your situation.

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What will happen to my creditors if I file for bankruptcy?

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