Protection. This is one of the most used words associated with bankruptcy. However, there are some details and information imperative to know to rightly protect yourself against it.
What does “Bankruptcy Protection” actually mean and what are the things you must do concerning this.
Bankruptcy Law means Federal Law. All bankruptcy cases are filed and administered in Federal Courts and are found in the Title 11 of the United States Code.
This will protect you because the power of the Federal Court is superior to the State Court’s power because of the supremacy clause of the United States Constitution.
Bankruptcy Law offers protection. This law is powerful and entails heavy penalties for the creditors who violate it by trying to enforce any claims or judgements against the debtor. Any lawsuits or judgements issued by the state court against them will automatically become legally unenforceable.
This law can help avoid economic enslavement.
Filing bankruptcy can protect the rights of the people. This right holds to become self-evident, non-negotiable, and God-given. In simple terms, this is the right to be ‘left alone’ and to be able to pursue happiness and reap the benefits of their hard work.
Once you file a bankruptcy case, an automatic issue ‘Automatic Stay’ is ordered, wherein creditors are not allowed to contact the debtors by any means. The creditors do not have the right to sue you or continue any lawsuit they have filed against you.
When you have no resources to pay for your debts, filing for bankruptcy is both an ethical and correct thing to do. It is a fair move to provide creditors a transparent report of one’s financial situation through filing a petition and providing evidence.
Evidence that the debt can not be paid because of the financial situation of the debtor, providing the freedom to start over.
At the end of it all, bankruptcy mainly protects your freedom. Life itself. Why? because capitalism involves risk. Without this risk, there is no gain, and without it, we lose any economic progress.