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

When filing for Chapter 7 Bankruptcy in West Virginia, your creditors will be required to stop all attempts to collect debts owed to them. This is the purpose of Chapter 7 Bankruptcy: to give you a “fresh start.” When you file for Chapter 7 Bankruptcy, the court will issue an order called the Automatic Stay. This order prohibits your creditors from attempting to collect the debt from you personally by calling, writing, or filing a lawsuit. It also stops any collection actions, such as wage garnishments, foreclosure, or repossession. The Automatic Stay also prevents the creditors from creating liens on your property or raising the interest rate on your debts. When you file for Chapter 7 Bankruptcy, the Bankruptcy Trustee will review your assets and liabilities. The Bankruptcy Trustee will then liquidate any non-exempt assets to repay your creditors. Your creditors may only receive a percentage of what you owe them, depending on the assets liquidated by the Trustee. When your Bankruptcy is complete, any discharged debts will be eliminated and considered “no longer owed.” In other words, you are no longer liable for the debts that were discharged. Your creditors are not allowed to attempt to collect any debts that were discharged in your Bankruptcy.

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

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