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

If you file for bankruptcy in South Carolina, your creditors are legally prevented from collecting on any debt that you owe them. This means that they cannot take any action to collect the money, including filing a lawsuit, garnishing your wages, or harassing you for payments. However, creditors may still be able to recover some of the debt. When you file for bankruptcy in South Carolina, an automatic stay immediately goes into effect. This prevents the creditors from taking any further action to collect the debt. They will need to wait until the bankruptcy process has been completed to try to recover the debt. In most cases, your creditors will not receive any money from your bankruptcy filing, even if they filed a claim with the bankruptcy court. Creditors are paid from the assets of the debtor. Your creditors may still receive a percentage of the debt depending on the type of debt and the amount you owe. For example, secured debts (such as a car loan) often have priority over unsecured debts (such as credit card debt). So, if you owe money on an auto loan, your creditor may receive part of the proceeds from the sale of your car when the bankruptcy is complete. It is important to remember that bankruptcy does not necessarily erase all of your debt. Certain types of debt, such as certain taxes and student loans, are not dischargeable in bankruptcy. You may still be required to repay these debts after your bankruptcy is complete.

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

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