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?
What “Protection” Does Bankruptcy Offer?
- 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.
- 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.
- 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.
The “Automatic Stay” offers immediate protection to bankruptcy filers from virtually all collections, lawsuits, garnishments, foreclosures, repossessions, judgments or other debt collection related legal proceedings. The bankruptcy court mails notice of the automatic stay order to all the bankruptcy filer’s creditors, associated lawyers and parties of interest that may be seeking payment or plan to request payment in the future on current debt. Creditors in willful violation of the automatic stay may face penalties, including Fines and Sanctions for contempt of a Federal Court Order, Punitive Damage Awards, Court Costs, and Attorneys’ Fees.
If you are struggling under an impossible burden of debt, there is hope. Get in touch with the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. today. We help good people through bad times every day, and we can help you, too.