To assure you receive an ‘automatic stay’, which is granted to you by operation of law, you should file for your bankruptcy under Chapter 7, and meet with all legal requirements and charges. Only then, will you be able to stop overall collection actions on your properties. No creditors can initiate or continue lawsuits, wage garnishments or request payments by phone, providing the stay is valid.
If you’re facing a severe financial crisis and would like to file for bankruptcy, then the best option for you is to approach a lawyer who is familiar with the bankruptcy concepts. Though this can be done on your own, it is not recommended for you to do therefore. As filing for bankruptcy is not an easy task, and that it consumes lot of time and energy, one is always advised to approach a bankruptcy lawyer in this regard.
Filing bankruptcy under chapter 7 of the bankruptcy code, costs almost 250 to 350 dollars depending upon the specific case. However, you should not forget regarding the long-term bankruptcy expense that chapter 7 bankruptcy brings with it. Once you are declared bankrupt under this chapter, the bankruptcy will keep affecting your financial life negatively, for the next 10 years at least.
If you file bankruptcy under chapter 7, what this means is that you are asking to wipe out your debts, but in return for giving up some property. Under this case, your private property will be exempt. Another property which is not exempt will be sold and creditors will be paid back.
The applicant will, however, attend the 341 meeting (so called as it is required by section 341 of the Bankruptcy Code). In this meeting, the person applying for bankruptcy meets with all creditors involved and answers questions pertaining to assets, property, etc.
So it may also be a good idea to look for debt relief counseling prior to filing for bankruptcy, because there are many valid repayment plans a bankruptcy attorney can suggest, so as to get out of debt effectively.