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

When filing for Chapter 7 Bankruptcy in Virginia, your creditors receive notice that you have filed and they must cease any attempts to collect a debt from you. As part of the Chapter 7 Bankruptcy process, a court-appointed trustee takes control of your assets. The trustee will then sell your non-exempt assets and use the money to pay your creditors. If the sale of your assets does not cover the full amount of your debt, it is possible that your creditors may not be paid in full, depending on the specific bankruptcy law in Virginia. In addition, once you have filed for Chapter 7 Bankruptcy, an "automatic stay" is put into effect. This stay prevents creditors from taking any further collection actions against you, including filing a lawsuit, garnishing wages, and contacting you for payment. The stay is in place until the completion of your bankruptcy case. However, in certain cases, creditors may be able to obtain relief from the stay. This means that creditors may continue to take collection action against you, depending on the specifics of your case. If you have any questions regarding your creditors, it is best to speak to a qualified attorney who can help you understand the details of Chapter 7 Bankruptcy in Virginia.

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

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