Bankruptcy

• A successful bankruptcy will either eliminate or reduce your debt. The U.S. Bankruptcy Court has locations in all 50 states and in many existing courthouses. Depending on your assets, you may qualify for a Chapter 7 or Chapter 13 bankruptcy. A case with no assets or very limited assets will likely qualify for Chapter 7 and have all debts erased. A person with assets may only qualify for a Chapter 13, which will reduce your debt and place you on an affordable payment plan. To file, you must fill out and file a bankruptcy petition with your local bankruptcy court, work with a trustee and have a judge approve the petition. While this sounds like an easy process, it is anything but. Without the help of an attorney, people rarely file for bankruptcy correctly, according to Uscourts.com.
  
  

Credit Card Companies and Collections

• Your credit card company will try to collect the debt for a certain amount of time before passing it to a collection agency. Generally, a collection agency will attempt to collect the debt with more aggression. Every creditor is different in the debt collection process. Some companies have inside collections and some contract with outside collection agencies. Others simply sell the debt to a collection agency and write it off.
  
  

Bankruptcy and Collections

• The filing of bankruptcy immediately halts any further collection attempts. When you file bankruptcy, the court notifies all of your listed creditors. This notice tells the creditor you have filed bankruptcy and all collection activities must halt. You also may send the creditor the case number and date you filed the petition if you need the creditor to cease contacting you. A creditor cannot contact you by phone, mail or proceed with any legal action until the bankruptcy case concludes. If the court grants bankruptcy, all collection actions will remain halted. If dismissed, creditors can resume collection efforts.
  
  

Continued Contact

• If a creditor attempts to collect on a debt after you have filed bankruptcy, determine whether he received notification from the court. If you did not include him in the filing paperwork, amend the petition to do so. If the creditor was included, contact your attorney. The attorney will contact the creditor. If you are filing pro se, send a letter to the creditor informing him that you are in bankruptcy and collections must cease. Give the creditor the court name and case number. If collection attempts continue, speak to the trustee assigned to your case. You may be entitled to file suit against the creditor because continued activity is illegal and prohibited by the court.