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How does bankruptcy work?

user365735
New Contributor

How does bankruptcy work?

What I mean is, once I retain a lawyer, and we agree to file...

Once that happens, how quick do stop actions take affect? I forget the term....

I have a pending lawsuit may 2nd and also a storage unit due for auction may 2nd.

 

I just don't have all my paperwork yet! Taxes etc which I am working on. Can we file next week and stop all collection efforts? I just need time to finish my taxes and collect all creditors info. 

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FinStar
Moderator

Re: How does bankruptcy work?


@user365735 wrote:

What I mean is, once I retain a lawyer, and we agree to file...

Once that happens, how quick do stop actions take affect? I forget the term....

I have a pending lawsuit may 2nd and also a storage unit due for auction may 2nd.

 

I just don't have all my paperwork yet! Taxes etc which I am working on. Can we file next week and stop all collection efforts? I just need time to finish my taxes and collect all creditors info. 


Are these the same taxes you referenced from these two topics from 2021?

 

https://ficoforums.myfico.com/t5/Bankruptcy/Need-to-file-and-have-not-done-taxes-in-a-few-years/m-p/...

 

https://ficoforums.myfico.com/t5/Bankruptcy/What-is-the-trustee-looking-at-with-taxes/m-p/6318523

Message 2 of 5
EquityinScoresNow22
New Contributor

Re: How does bankruptcy work?

@user365735 I realize all attorneys aren't the same, but ours filed the case before we finished the taxes. In fact, we even had our 341 meeting of the creditors before our taxes were complete. The trustee just directed us to get them to our lawyer as soon as we could. Didn't want to delay our case, so I got them ready in about two days. There's basic information that the attorney needs to file the case, whether it be C7 or C13. I would get those taxes done ASAP so your case can move!

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Message 3 of 5
EquityinScoresNow22
New Contributor

Re: How does bankruptcy work?

Forgot to mention, it's called the "automatic stay." The AS goes into affect as soon as your case is filed with the court (which I'm sure your attorney will do electronically). Creditors must stop all collection efforts at that point or be in violation of the stay. But, the creditors have to be notified that this has happened. Most will know since the credit bureaus will be notified which will trigger chain reaction notifications such as any credit monitoring you may have thru an app or thru a creditor. Hope this helps.

Best!

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user365735
New Contributor

Re: How does bankruptcy work?

Thank you. I think my lawyer wants my taxes done to confirm I meet chapter 7 needs. He did say he can emergency file and then I have soso time to get everything to him. The issue is I can't do my taxes right now because Amazon is giving me issues with logging in as my seller account was suspended. I cant access the required reports right now.

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