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

If you file for bankruptcy in Texas, your creditors will not be able to collect any of the debts you owe them. This means they will not be able to garnish your wages, call you to collect the debt, or take any other action against you for the debt. When you file for bankruptcy, the court will issue an "automatic stay." This means that all proceedings against you are stopped and all creditors must stop their collection efforts. This will give you time to negotiate a payment plan with your creditors or reorganize your finances. All of your unsecured debts will be eliminated in a Chapter 7 bankruptcy, and some of your secured debts will be discharged as well. This means the creditor cannot take any action to collect the debt, even if you still owe money on it. In a Chapter 13 bankruptcy, your creditors are allowed to seek repayment of your debts through a court-approved repayment plan. The amount and duration of payments are determined by the court. You may be able to keep some of your property, such as your house or car, during this time, but you must make regular payments according to the plan. No matter which type of bankruptcy you file, it is important to understand that filing for bankruptcy does not mean that all of your debt will be erased. Bankruptcy will not help you if you have certain types of debt, such as student loans, child support, or certain taxes. In most cases, filing for bankruptcy will only help you during a temporary financial hardship.

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

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