Bankruptcy is an often misunderstood subject that can land people in a lot of trouble when they proceed under false information. While the court system does its best to educate would-be filers, it’s not always successful. One of the main reasons people file bankruptcy in the first place is because they hope to obtain instant relief from their financial duress. While this is possible, you should understand what it entails.
The moment you formally declare bankruptcy, the courts put what’s called an “automatic stay” in place. This “automatic stay” essentially “stays the hand” of any creditor trying to get their money or property back from you. Legally, they are obligated to cease any debt collection practices as soon as they’re notified of your filing (a few exceptions exist). If they continue with them, they could find themselves in front of a judge.