Bankruptcy is a way to temporarily suspend, and later prevent, all debt collection actions for debts you had at the time you filed your bankruptcy petition.
Once a person files for bankruptcy, the federal court grants an “automatic stay.” This prevents creditors from attempting to collect on any outstanding debts. Creditors may petition the court for relief from the automatic stay. Often, creditors whose loans are secured by property are permitted to take possession of that property.
Tags: Bankruptcy
