Will filing for Chapter 7 Bankruptcy stop collection efforts?

Yes, filing for Chapter 7 Bankruptcy in North Carolina will stop collection efforts by creditors. Once a debtor files for Chapter 7 Bankruptcy in North Carolina, a court order known as the “automatic stay” goes into effect, which prevents creditors from attempting to collect on any debts. This means that creditors will not be able to contact the debtor or attempt to collect any debts, including through wage garnishments, lawsuits, and phone calls. The automatic stay also prevents creditors from attempting to repossess any of the debtor’s property, such as a vehicle or furniture. Even if a creditor has obtained a lien on the debtor’s property, the automatic stay will still prevent the creditor from taking any action to repossess the property. Additionally, the automatic stay prevents creditors from filing any new lawsuits against the debtor. This means that even if a creditor is able to obtain a judgment against the debtor in a courtoom, the creditor will not be able to attempt to collect on that judgment. In some cases, the automatic stay may be lifted by a court order, which will allow creditors to contact the debtor and attempt to collect on the debt. However, the automatic stay is still considered a powerful tool to protect a debtor from creditor harassment and legal action, and it will remain in effect until the Chapter 7 Bankruptcy is finalized.

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Will filing for Chapter 7 Bankruptcy stop collection efforts?

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