Bankruptcy Attorney FAQs

When will bankruptcy stop the creditors?

When your bankruptcy petition is filed with the court. Our Sacramento bankruptcy attorney can electronically file your petition with the U.S. bankruptcy court. Once your petition has been filed a case number will be assigned to your case. Sacramento Law Group will give you that case number. After that, if a creditor calls you, tell them your case number and demand that they stop calling you pursuant to federal law.

What if a creditor continues to call after I file for bankruptcy?

Tell your bankruptcy attorney. The creditor is in violation of the automatic stay and may be subject to sanctions.

How does bankruptcy stop creditors?

The automatic stay. The automatic stay is codified in 11 USC §362 and prohibits creditors from taking collection actions once a bankruptcy petition has been filed.

From Sacramento bankruptcy attorney Adam Garcia: The purpose of bankruptcy is to help people get a fresh financial start. This goal cannot be accomplished if the act of filing for bankruptcy starts a race between creditors to strip the petitioner of everything they have. (“Quick, this person filed for bankruptcy. Let’s take his car, house, garnish his wages, etc.”) If this were the case, creditors would not participate in the bankruptcy system. To help people get a fresh start and to force creditors to participate in the bankruptcy system the automatic stay was created.

Will multiple bankruptcy filings affect the automatic stay?

Multiple bankruptcy filings can affect the duration of the automatic stay. While a complete evaluation of the various ways in which the automatic stay may be affected by multiple filings or actions is beyond the scope of this answer, multiple filings within the same year can affect the duration/implementation of the automatic stay. If you filed another bankruptcy case that was dismissed within the previous year and you file again, the automatic stay expires after 30 days unless extended by the court. If you filed 2 bankruptcy cases that were dismissed within the same year of your new filing, the automatic stay does not go into effect. Why these rules shortening the automatic stay? Multiple dismissed filings within a short amount of time may indicate that the petitioner does not care about achieving debt relief; they just want to stop creditors. If one could file as many times as one wants with the automatic stay going into effect every time, secured creditors could have difficulty repossessing property for nonpayment.

Can I discharge my student loans in bankruptcy?

Not usually. Student loan debt is generally not dischargeable in bankruptcy. There is a hardship exemption under which student loan debt can be discharged, but qualifying for the hardship exemption is nearly impossible. Essentially, to discharge student loan debt you must not be able to maintain a minimal standard of living were you forced to repay your student loans and that situation must be likely to continue for a significant portion of the repayment period. Also, you must have made a good faith effort to repay your student loans. This is a difficult test to meet. In so many words, you would have to be living below the poverty line and there would have to be a certainty of hopelessness of your ability to repay your student loans within the repayment period. If you have substantial student loans consult with an experienced bankruptcy attorney.

Will bankruptcy hurt my credit score?

Bankruptcy can have a negative impact on your credit score. However, if your credit is already suffering from a pattern of late or missed payments, bankruptcy can be the first step towards repairing your credit. Once you have eliminated burdensome debt you can dedicate your income to repaying manageable debt on time, thereby rebuilding your credit.