The bankruptcy code is found in Title 11 of the United States Code; it is federal law administered in Federal Courts. The U.S. Dept. of Justice administers all bankruptcy cases. Bankruptcy laws are powerful, and creditors in violation can see heavy penalties. When a debtor files a bankruptcy petition, they immediately receive the benefits of bankruptcy protection , but what sort of protection does bankruptcy offer?

1. Protection from Creditor Harassment: Immediately when a bankruptcy petition is filed, the automatic stay of bankruptcy goes into effect with a few limited exceptions. The automatic stay prevents creditors from attempting to enforce claims or judgments against the bankruptcy petitioner.
2. Protection from Legal Action: Some creditors seek payment through the courts with judgments, wage garnishment requests, liens, etc. Any lawsuit filed or judgment issued in or by a State court is subject to the automatic stay of bankruptcy immediately upon filing the bankruptcy petition. Bankruptcy’s automatic stay makes most State court lawsuits or judgments against the petitioner legally unenforceable outside of bankruptcy.
3. Protection from Economic Enslavement: The U.S. bankruptcy code protects rights held as self-evident, inalienable, and God-Given: the right to be left alone, to pursue happiness, and to enjoy the fruits of your labor. The bankruptcy court has the power to issue a discharge order to debtors seeking the protection of bankruptcy under 11 USC 727. The discharge order cancels the debtor’s obligation to repay completely.