What happens when you file for bankrupsey?

When you file for bankruptcy, you initiate a legal process that helps you eliminate or reorganize your debts under the protection of the bankruptcy court. Depending on the type of bankruptcy you file for (such as Chapter 7 or Chapter 13), you may either liquidate some assets to pay creditors or create a repayment plan to settle debts over time. Filing triggers an automatic stay, which temporarily halts collection actions from creditors. However, it can impact your credit score and remain on your credit report for several years.