If you are like a lot of people in Illinois, you might not know that there are multiple types of consumer bankruptcy plans. When most consumers think about bankruptcy, they automatically think about losing assets. This can happen with a Chapter 7 bankruptcy, called a liquidation bankruptcy as assets may be seized in order to repay creditors. However, this does not happen with a Chapter 13 bankruptcy plan.
During a Chapter 7 bankruptcy, you can discharge most debt and emerge from the pile of overwhelming expenses with a clean financial slate. After listing all your credit card debt, medical expenses and loans, you can essentially wipe them free of your account and begin again. Yet, while filing for a Chapter 7 bankruptcy, you may decide to keep paying on a loan, even after the case is discharged.
If you are one of the many Americans who are overwhelmed with debt, you may receive a host of calls from creditors and collection agencies who are trying to collect past due amounts on your financial obligations. These calls can become quite harassing, as collectors may start calling at all hours of the day and night in an attempt to get you to make a payment. Once you file your bankruptcy papers with the court, an automatic stay is placed on your name and creditors are no longer able to contact you regarding your debt. In fact, when the automatic stay is in place, collection agencies and creditors must stop any wage garnishments, and cannot pursue any lawsuits that may have been initiated on your case. This includes all actions and methods that are used to collect a debt.