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What happens to the creditors after I file my bankruptcy?

Immediately upon the filing of a bankruptcy there is a temporary protection put in place against the collection of any debt claims called the "Automatic Stay". The Automatic Stay is designed to give the debtor a moment to breath and to preserve any assets for possible liquidation by the Trustee. Therefore, immediately upon filing a bankruptcy petition, all attempts to garnish a paycheck, shut off a utility service, suspend a drivers license, or conduct a Sheriff's Sale on a home, must automatically cease. There are penalties for creditors who collect during a period of automatic stay, including particularly harsh consequences if the creditor had actual knowledge of the bankruptcy.

The Automatic Stay is then replaced by the "Order of Discharge" at the conclusion of your case. The Order of Discharge is a permanent injunction on the part of the creditor to ever collect on the debt. The debt still exists, and can show up on your credit report as "discharged," but the creditor can never collect on that discharged debt ever again.

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