While bankruptcy is a measure of last resort, its purpose is clear: to provide an overwhelmed debtor with some much needed relief. This relief comes in the form of the discharge of a wide range of qualifying debt. At the end of the day, this is supposed to translate into a sense of relief and freedom. Sadly, there are times when creditors continue to call after a bankruptcy court discharges a person's debt.
If you are struggling with debt, you are well aware of this timeless fact: creditors are relentless in their pursuit of money. They are willing to engage in all manner of collection efforts, including harassing letters and phone calls to get what they believe they are owed. Sometimes, creditors will even file lawsuits against debtors.
Nobody wants to file bankruptcy. On either a personal or business basis, no one manages their finances or starts their own business with a vision of financial turmoil. Rather, we work hard, take risks, and do the best we can to provide for our families. Unfortunately, things happen along the way that can send us spiraling down a financial path we did not want to travel.
When you file for bankruptcy protection, the automatic stay prevents creditors from filing lawsuits against you. However, there is a procedure within the bankruptcy court called filing an "adversary proceeding," which is a lawsuit that is filed within your bankruptcy case. An adversary proceeding addresses issues that are more complex than what can be accomplished by filing a motion with the court.
If you are considering filing for bankruptcy relief and you have recently inherited an individual retirement account (IRA), it is imperative that you seek advice from a seasoned bankruptcy attorney. The United States Supreme Court made a ruling in 2014 that a debtor seeking debt relief in bankruptcy must forfeit all funds from an inherited IRA to pay creditors and settle debts.
If you are facing overwhelming amounts of debt and you are not sure what debt relief options are available to you, let us help. Bankruptcy is not the only way you can deal with your debt, especially if you seek help before your financial situation gets beyond repair. We can help you explore options such as loan modifications, debt settlements, and fighting collection actions.
Many people file for bankruptcy protection because they need relief from their creditors. A personal bankruptcy filing can be shelter from the harassing collection efforts of debt collectors. However, while rare, it is possible for a lawsuit to be filed against you in your bankruptcy case. This type of action is commonly referred to as an "adversary proceeding."
When you emerge from a personal bankruptcy and the overwhelming burden of your debt has been lifted, you can relax some. However, it is important that you don't fall into the trap of thinking that your work is done. As soon as possible, you should begin rebuilding your financial stability as well as your credit score.