HOW THE AUTOMATIC STAY OF BANKRUPTCY STOPS YOUR CREDITORS ?

As soon as you file your bankruptcy, the automatic stay offers immediate legal protection against creditors.

From the moment you file your bankruptcy, the “automatic stay” goes into effect and immediately stops collection efforts and legal proceedings by the creditors, collection agencies etc. Also, once you hire a bankruptcy attorney, you should refer your creditors to that attorney/firm. Under the Fair Debt Collection Practices Act, the creditors are not allowed to contact you and they must go through your attorney. This immediately stops those harassing phone calls! Now you are free to reorganise your finances in a chapter 13 bankruptcy or quickly discharge your debts in a chapter 7 bankruptcy without any pressure from your creditors. Your attorney will advice you on which chapter is the most beneficial for you.

It is not actually the attorneys that stop legal actions against you but is, in fact, “The Automatic Stay” protection afforded everyone in bankruptcy under the bankruptcy code that stops all efforts from your creditors.

Automatic stay stops >> Law Suits , Collections and Garnishments

Lawsuits: It is deemed illegal as per “automatic stay” for a creditor to file and pursue a lawsuit and thus make any judgment obtained after your bankruptcy, filing void. If there is a court date and you want it to be stopped immediately, then your attorney can quickly send the creditor a notice of your filing and mostly after this you don’t have to appear in the court.

Collections: Collectors are trained to worry and harass you in order to try and get as much money as early as possible. These collectors will do whatever without worrying and won’t even give it a second thought even if you cannot afford food, shelter and other basic amenities.
Bankruptcy stops all collection calls or letters and stops any action being taken to take your money or property.

Garnishments: The bankruptcy puts a stop on garnishment at any point , if you are worried that you will be garnished in the near future or already being garnished then by filing bankruptcy it will put an immediate stop to any more money being taken from you and in many cases your attorney can even get your money back.

Utility Disconnections: If this is your situation that you are not able to pay your utility bill and the utility bill company is threatening you to that it will disconnect your gas or telephone services immediately then in such a situation filing bankruptcy will stop the disconnection for a minimum of 20 days.

• Bankruptcy filing immediately stops foreclosure and Repossession
• Bankruptcy allows you to make your payments over an extended definite period in a bankruptcy payment plan so you can keep your property.
• A creditor who wants to foreclosure on your home or vehicle after you fill your bankruptcy can no longer do so.
• The automatic stay stops eviction from your home and gives you great help.
• Lien Stripping , with the help of this you are allowed not to pay your second or higher mortgage from your home etc

Exceptions to the automatic stay :

The automatic stay does not apply to criminal actions, domestic support obligations such as Divorce or child support. As a result if your wages are being garnished to satisfy domestic support obligations, the garnishment will not stop if you fill bankruptcy.
The Automatic Stay will not stop

• Domestic violence
• Child support
• Divorce
• Spousal support
• Criminal actions
• Traffic Violations