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

Filing for bankruptcy in Virginia can offer relief from creditors, but it does not necessarily mean that all of your debts will be cancelled. When you file, a court order known as the automatic stay will be put in place, meaning that creditors can no longer contact you to collect money. The automatic stay also stops most legal actions that have been taken against you, so as long as you stay within the law, creditors cannot contact you or take action against you while the automatic stay is in place. In many cases, creditors will be able to recover some of their money depending on the type of bankruptcy you file. If you file for Chapter 7 bankruptcy, your assets will be liquidated to pay off creditors. As part of this process, some of your debts may be discharged and creditors will not be able to collect on them. On the other hand, if you file for Chapter 13 bankruptcy, you will be required to make payments to creditors over a period of three to five years. Any remaining debt at the end of the payment plan will be discharged and creditors can no longer collect on it. Although filing for bankruptcy can offer relief from creditors, it is important to note that it will have a lasting effect on your credit score. Your credit report will show that you have filed for bankruptcy and creditors may be hesitant to extend credit to you in the future. Therefore, before you decide to file for bankruptcy you should speak to an attorney to make sure it is the right choice for you.

Related FAQs

What is the difference between a bankruptcy trustee and a bankruptcy lawyer?
What is the difference between secured and unsecured debt?
What is the difference between a voluntary and involuntary bankruptcy filing?
Are there any sites where I can get reliable information about bankruptcy law?
What is the difference between secured and unsecured creditors?
What are the restrictions for filing for bankruptcy?
Does filing for bankruptcy have any effect on other legal proceedings?
How do I know if I qualify for a Chapter 7 bankruptcy?
What are the requirements for filing for bankruptcy under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005?
What is an adversary proceeding?

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

Related FAQs

Related Blog Posts