If you’re experiencing financial difficulties, you’re not alone. There are thousands of bankruptcy cases filed each year, from indebted businesses to consumers who are looking to get their finances in order. When you have many assets to protect, filing for bankruptcy may be a good idea, and it helps to have an experienced attorney on your side. Today’s blog from Groce & DeArmon features some basics of bankruptcy law, including creditors’ claims, chapter 7 bankruptcy, and the automatic stay.
What Is a Creditor in Bankruptcy?
A creditor is someone that has a right to payment from the debtor. It could be a bank, collection agency, or government entity that has provided money to someone and expects to be compensated at a later time. The debtor may choose to file for bankruptcy if he/she is getting pestered and is unable to repay a creditor.
What Is a Secured Claim?
Creditors can make secured or unsecured claims in bankruptcy. With secured claims, the creditor has a debt that you owe and a registered lien on property you own. Some examples of secured bankruptcy claims are car loans, mortgages, unpaid real estate taxes, and other property liens.
What Is an Unsecured Claim?
On the flip side, an unsecured claim means the creditor doesn’t have a lien. There are two kinds of unsecured claims: priority unsecured claims and nonpriority unsecured claims. To learn more about these claims, contact the bankruptcy attorneys at Groce & DeArmon.
What Is the Automatic Stay in Bankruptcy?
If you’re being sued by a creditor, your house is being foreclosed, or your wages are being garnished, Groce & DeArmon can help you get (temporary) relief through the automatic stay.
The automatic stay is a court order that applies as soon as a bankruptcy case is filed. It’s a one-page document that gets issued to creditors informing them of your bankruptcy and stopping them from continuing with debt collection efforts. After a debtor has pursued protection from the bankruptcy court, garnishments, lawsuits, collection calls, foreclosure, emails, and any other contact with the debtor must be terminated. The federal bankruptcy court may impose sanctions on creditors who violate the automatic stay. However, this motion does not last forever.
Related Post: Understand the Automatic Stay: Advice from a Bankruptcy Attorney
How Long Does the Automatic Stay Last?
The automatic stay will take effect whether you file for Chapter 7 or Chapter 13 bankruptcy. In Chapter 7 bankruptcy, the automatic stay will only last for up to roughly three months. If you file for bankruptcy multiple times in a year, it only lasts for 30 days or in some cases it may not take effect at all.
Related Post: Bankruptcy and Foreclosure: Advantages of Filing Before Foreclosure
Contact a Qualified Bankruptcy Attorney
If you’re thinking about filing for bankruptcy, contact Groce & DeArmon for expert advice. Our attorneys are qualified to handle your bankruptcy case, no matter how complex it may be. Call (417) 862-3706 or contact us online for a free initial consultation.