What happens to my creditors when filing for Chapter 7 Bankruptcy?

When filing for Chapter 7 Bankruptcy in New Hampshire, creditors are still legally allowed to collect on their debts. However, the court may limit the actions of creditors through an automatic stay. This prevents creditors from contacting debtors in order to collect on debts, as well as from issuing any type of legal action in an attempt to collect. In addition, creditors may not garnish wages or levy any of the debtor’s bank accounts while the bankruptcy case is pending. This means that the creditors cannot take any money from the debtor’s accounts or wages until the court approves the plan. Once the court approves the plan, creditors are allowed to collect on their debts according to the plan. The court also has the power to discharge certain debts in separate bankruptcy proceedings, which means that creditors will not receive any payment for the discharged debt. However, if the court does not discharge a debt, the creditors can still pursue collection on the debt, even after the bankruptcy case is closed. In summary, creditors will still have the ability to pursue collection on debts after filing for Chapter 7 Bankruptcy in New Hampshire, although some limitations may be put in place. The court may also discharge certain debts, meaning that the creditors will not receive any payment for those debts.

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What happens to my creditors when filing for Chapter 7 Bankruptcy?

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