If you haven’t filed or had a case dismissed in the last year then when you file for bankruptcy, you receive immediate protection from creditors through a special court order known as the bankruptcy automatic stay.
Think of it as all your creditors and debts going into limbo. Your creditors must stop collection efforts. They must immediately stop foreclosures, repossessions, lawsuits and wage garnishments. Creditors are no longer allowed to contact you in any form, phone, mail or email.
The court may grant a creditor “relief from the stay” if the creditor can show that the stay does not give them “adequate protection” of their secured property. Usually the creditor is asking for a return of property, be it a boat, car or real estate. In most cases it is property that you have already said you want to return. In order for the creditor to take it back they have to ask the court to allow them Relief from the Automatic Stay.
The automatic stay stays in effect throughout the life of your bankruptcy. If you have more questions, please feel free to call us.