Debtors must take two credit education courses. The first course is a credit counseling course that the debtor takes prior to filing a Chapter 7 or Chapter 13 petition. The second course is a financial management course (debtor education) that is taken after the debtor files the petition.
The automatic stay begins immediately upon filing a bankruptcy petition. This is an automatic injunction prohibiting creditors, with certain exceptions, from collecting debt from you. The automatic stay protects against foreclosure, repossession, liens, garnishments, and harassing phone calls and letters. The automatic stay applies to all types of bankruptcy. Secured creditors can motion the court to have the automatic stay lifted upon a showing of cause.
Credit and Bankruptcy:
If a debtor files a Chapter 7 bankruptcy petition and receives a discharge the bankruptcy will show on the debtor’s credit for 10 years. If a debtor files a Chapter 13 bankruptcy petition and receives a discharge, the bankruptcy will show on the debtor’s credit for 7 years.
After filing bankruptcy most people are a better credit risk because they no longer owe debt to many creditors. In most cases, bankruptcy provides debtors with a fresh start.