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

If you file for bankruptcy in Washington, your creditors will no longer be able to pursue legal action to collect payment from you. Instead, the court will control your assets and debts and determine how they should be paid. Depending on the type of bankruptcy you file, certain assets may be liquidated and the proceeds used to pay off your creditors. The court will also create a payment plan for your remaining debts. Your creditors will be required to abide by the payment plan established by the court. Once a payment plan has been approved and confirmed by the court, your creditors must accept the terms or risk being held in contempt. Additionally, if you file for a Chapter 13 bankruptcy, the court will usually impose an automatic stay, which prohibits creditors from attempting to collect any debt from you during the bankruptcy process. Under the bankruptcy code, creditors may file an objection to the payment plan if there is a dispute about the terms. If a creditor files an objection, the court will hear both sides of the dispute and make a decision. The court may then change the payment plan in order to resolve the dispute. However, once the payment plan has been approved, creditors may not try to collect more money from you.

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

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