How does bankruptcy affect my collection defense rights?

When it comes to collection defense rights in Texas, filing for bankruptcy can vastly affect the course of action that you are able to take. Bankruptcy proceedings are a way for individuals and businesses to reorganize their debts. Filing for bankruptcy will place an “automatic stay” on any collection activities, meaning the creditors will not be able to take any further actions against you during the bankruptcy. The automatic stay will also prevent creditors from filing lawsuits against you, attempting to contact you, or garnishing your wages. Once the bankruptcy is filed, you must list all of the creditors to whom you owe money and provide them with notice of the bankruptcy; then, those creditors cannot attempt to collect the debts from you until the automatic stay is lifted. However, if your debt is ultimately discharged in bankruptcy, then the creditors are prohibited from seeking or continuing collection efforts against you, even after the automatic stay is lifted. This means that the creditor cannot call to collect the debt, send collection letters, or take any other action to attempt to collect the debt from you. As such, bankruptcy can provide you with additional protection from creditors who are attempting to collect debts from you.

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How does bankruptcy affect my collection defense rights?

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