What is an automatic stay, and how can it help you?

On Behalf of | Dec 17, 2021 | Bankruptcy Law |

If you are in debt, one of the things that you may want to do is to go into bankruptcy. Bankruptcy can be helpful since it gives you time to get your finances back in order and allows you to use legal protections to pay off and discharge certain debts.

When you are dealing with phone calls and harassing messages from creditors, collections agents and others, it can be difficult to manage. You may be scared to answer your phone or may not want to open your mail. An automatic stay helps with this.

An automatic stay’s purpose is to stop creditors and others who want to collect a debt from contacting you. On top of that, this legal protection will prevent further liens, the foreclosure process and other actions against you until you have your time in court and an opportunity to resolve these issues through bankruptcy.

When does an automatic stay go into place?

In this case, the “automatic” part of the name is reflective of when this stay goes into place. It happens automatically when you file for bankruptcy.

Immediately after you file, this stay is activated. At that point, all creditors and others trying to collect from you must stop their collections actions. If they need information, they should be rerouted to your attorney’s office to speak with them about the case.

An automatic stay helps give you peace of mind

While there are times when an automatic stay may be removed for a creditor, those are few and far between. Usually, the automatic stay allows debtors to breathe a sigh of relief as they are finally able to go without regular calls or contact from those trying to collect. This gives them time to look into their options, too, as actions like foreclosure activity are paused.

Bankruptcy can be a good way to get your finances back on track, to stop creditor harassment and to resolve your debts to have a more financially secure future. When you file, you’ll quickly see the impact of doing so, as most creditors will need to back down immediately.

 

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