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Road Bumps to Watch Out For When Filing for Bankruptcy

Experienced Attorney

An attorney has seen the many ways that road bumps can arise as someone is going through the process of filing for bankruptcy. Those who have never applied before, may believe that the steps are simple and that just about anyone can be approved for bankruptcy. However, the journey to being approved for bankruptcy isn’t always linear, and some serious issues can come up. That is why we recommend getting help from a member of our legal team who is familiar with bankruptcy legalities, instead of trying to go through this all on your own. 

Issues That Can Interfere with a Bankruptcy Petition

When first meeting with an attorney about your interest in applying for bankruptcy, he or she may ask about your current financial standing. They may request documents related to your income, debts, and living expenses, to ensure that filing for bankruptcy is in your best interest. Then, after submitting the appropriate paperwork, they can provide assistance if any of the following problems develop: 

  • The court has accused you (the debtor) of committing perjury or acting with fraudulent intentions
  • The court states that you (the debtor) did not provide required tax documents or other important documentation
  • You are having trouble locating or obtaining certain financial documents
  • You are concerned about how being approved for bankruptcy may impact your credit score 
  • You feel as though you applied to operate under the wrong bankruptcy chapter
  • A creditor has violated an “automatic stay” by contacting you to collect a debt payment

How a Creditor May Violate an Automatic Stay

Filing for bankruptcy means that an “automatic stay” will be enforced, where your creditors are no longer permitted to contact you or take collection actions against you. If you are contacted by a collection agency or creditor after the automatic stay has been set in place, contact your attorney immediately. You can bring a creditor before the bankruptcy court to face the repercussions of violating this protection. Actions that are deemed in violation of the automatic stay include: 

  • Contacting the debtor through telephone
  • Contacting the debtor through letters in the mail
  • The creditor filing a lawsuit against the debtor for nonpayment of debts
  • Having wages garnished from your paychecks to go toward paying off debts

Exceptions to the automatic stay rule can pertain to things like some family law matters (alimony or child support), criminal action against you, tax audits, and debts you accumulated after filing for bankruptcy. 

Filing for bankruptcy isn’t typically as easy as people think. For the process to go more smoothly, it often requires guidance from a legal professional. Those who feel as though they are drowning in debt, may become even more worn down if problems arise along the way. For answers to questions about filing for bankruptcy, an automatic stay violation, or court issues, we strongly recommend reaching out to a bankruptcy lawyer in Clearwater, FL right away. 

Thanks to the Law Office of Michael A. Ziegler, P.L. for their insight into bankruptcy law and potential road bumps when filing.

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