Bankruptcy Overview

Bankruptcy laws help people who can no longer pay their creditors get a fresh start. Once a debtor files for bankruptcy, creditors are prohibited to take any action against the debtor, unless they first appear in bankruptcy court, and file a motion with the bankruptcy court. Therefore, once a debtor files for bankruptcy, a creditor may not file suit against the debtor, obtain a judgment against debtor, call or communicate directly with the debtor, or take any steps to collect any debt from the debtor. That’s why it is most commonly referred to as “Bankruptcy Stay”.
The creditor instead, must first file a motion with the bankruptcy court, and obtain relief from the court to pursue collection of its claim, provided they have grounds to do so.
At the conclusion of the bankruptcy case, which can last approximately 4 months for chapter 7, and between 3 to 5 years in a chapter 13, the court will then order a discharge.
by liquidating assets to pay their debts or by creating a repayment plan. Bankruptcy laws also protect troubled businesses and provide for orderly distributions to business creditors through reorganization or liquidation.

What is a discharge?

A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts, and debtor is no longer legally required to pay any debts that are discharged. In fact, the discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.

Although a debtor is not personally liable for discharged debts, a valid lien (i.e., a charge upon specific property to secure payment of a debt, such as a home loan, or car loan) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien, in the event the debtor defaults on the payment obligation.

Most cases are filed under the three main chapters of the Bankruptcy Code – Chapter 7, Chapter 11, and Chapter 13.

For more information on each individual Chapter for bankruptcy, please check:

Filing Fees:

Currently, the bankruptcy court filing fees are:

  • Chapter 7 $299.00
  • Chapter 11 $1,039.00
  • Chapter 13 $274.00

Call Now For Free Initial Consultation

818.484.7823