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

If you file for bankruptcy in Nebraska, your creditors will no longer be able to collect debts from you. Once a bankruptcy is filed, creditors are legally prohibited from trying to collect the debt, except in certain, very limited circumstances. The bankruptcy court will issue an automatic stay, which is an order forbidding creditors from further attempts to collect from you. This stay prevents creditors from taking legal action, such as foreclosures, repossessions, or wage garnishments, and also stops communication efforts such as phone calls and letters. The bankruptcy court will also review your debts and decide how much of each debt, if any, you will have to pay back. Generally, the bankruptcy trustee will divide the funds available for payment of debts into classes and distribute them in a specific order. This means some of your creditors may not get the full amount of the money you owe them. Other creditors may get no money at all. Finally, filing for bankruptcy in Nebraska will also remove a lot of the negative information from your credit report. This will make it easier to rebuild your credit in the future. Once you file for bankruptcy, creditors are no longer allowed to report the debts as delinquent and your credit scores may improve as a result.

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

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