The first is called the Automatic Stay. This is a court order that makes it illegal for your creditors to call you, send letters for payment, or garnish your wages during your case. It can also halt foreclosure and repossession efforts in their tracks. The automatic stay typically goes into effect once the bankruptcy court clerk receives your bankruptcy petition and last for the duration of your case.

The second protection is the Debt Discharge. Upon the successful completion of your bankruptcy case, the debt discharge will prevent all future collection efforts by creditors on the debts that were included in your filing and discharged by the court. The debt discharge ends your legal obligation to pay the creditors in your bankruptcy case.

Bankruptcy laws may also protect certain property and assets from creditors. In a Chapter 7 bankruptcy case, the court is allowed to seize certain assets to pay creditors a portion of the debt owed. The good news is that each state has exemptions that prohibit the courts from taking some things – such as homes, cars, and retirement accounts. These exemptions vary by state, so be sure to learn the laws with help from a local attorney and see how much of your property you might be able to keep in a Chapter 7 bankruptcy.