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Common Concerns & Questions About Bankruptcy

Knowing debtor protections against a creditor lawsuit

| Feb 15, 2017 | Creditors' Rights |

Texas residents who are in debt and are no longer able to make their payments might face the threat of a lawsuit from creditors. Understanding creditor’s rights as well as protections that a debtor has can help in knowing what to do when this situation arises. People who are not aware of their options when they are being pursued by a creditor might take the threat of wage garnishment, strident collection practices and other actions seriously and allow it to dominate their lives.

There are numerous options to try to achieve debt relief. Whether it is bankruptcy or an alternative, having a full grasp of the potential methods of getting back on stronger financial ground will automatically make the debtor feel better. The overwhelming feeling of powerlessness can cause emotional strife to go along with the financial struggles.

When there is a bankruptcy filing, there will be what is known as an “automatic stay.” This will stop the creditors from contacting the debtor. It also stops any foreclosure actions and any attempts to seize bank accounts and other properties. When notice is given that a bankruptcy has been filed, the lawsuits will automatically stop. Before moving forward with any debt relief option, it is imperative to know how the entire process works and what is best for every particular individual.

The term “lawsuit” might sound intimidating when the creditor contacts the debtor and mentions this course of action. However, there are debtor protections in place under the law so that debtors can move forward without worry about lawsuits or other tactics that collectors will use.