Does a Chapter 7 Bankruptcy Petition Suspend Payment of All Debts?
When you file for protection in bankruptcy, you are immediately protected by the automatic stay, which prohibits your creditors from calling, writing or taking any legal action (outside of the bankruptcy proceeding) to collect a debt. With respect to certain debts, that means you can stop making payments and your creditors can’t hound you to keep making them. However, a Chapter 7 bankruptcy doesn’t simply let you stop making all payments and subsequently discharge them.
A Chapter 7 Doesn’t Generally Apply to Post-Petition Debt
A Chapter 7 filing lets you permanently discharge certain financial obligations—if your petition is approved, you won’t ever have to pay those debts off. However, you can only discharge pre-petition obligations. Any debt that you incur after you file for bankruptcy protection will not be included in your bankruptcy estate. Accordingly, if you have post-petition utility bills, child support or other family law obligations, credit card debt (always a bad idea), insurance obligations or rent payments, you won’t be able to use the bankruptcy proceeding to prevent creditors from attempting to collect those debts.
A Chapter 7 Discharges the Debt, but Not the Lien
If you have secured debt, such as a mortgage or auto loan, you can discharge the debt in Chapter 7, but the lien will remain in place. The lender may then seek to exercise rights under the lien, such as foreclosure or repossession.
Contact an Experienced Rockwall, TX Bankruptcy Attorney
At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County and the surrounding counties.
