The Automatic Stay in Bankruptcy

Dealing with debt is never easy, even if you’re able budget your money and make regular payments. But what happens when something in your life changes and you can no longer to make full payments on time? You may be able to scrape by with minimum payments for a while, but soon you’ll realize the debt isn’t really going away. If you miss a payment, you may be able to ignore phone calls at first, but once you’re sent to collections, it will become clear that something needs to change. At first it’s easy to feel powerless, scared, and overwhelmed, but there is relief available through bankruptcy. If you think bankruptcy might be the right solution for you, I’m here to walk you through the process and make sure you’re informed about the benefits and drawbacks.

The Relief You Need

One of the immediate benefits of filing bankruptcy is that the Automatic Stay goes into effect. As soon as you submit your paperwork and your Chapter 7 or Chapter 13 is filed, your protection begins. At this point, most creditors can no longer legally contact you, attempting to collect their debts. These debts include credit cards, medical bills, utilities, and personal loans. If bill collectors do call, just give them your case number and my contact information. I’ll make sure they have the information they need and you won’t have to worry about phone calls or letters anymore.

While the Automatic Stay is a relief for many kinds of debt, it will not stop payments for alimony, child support, or back taxes. These payments may be modified to better fit your current financial situation, but you’ll still be responsible for keeping up to date with these responsibilities. The Automatic Stay does not stop court proceedings to establish or modify paternity or visitation.

Filing bankruptcy will give you the freedom to stop making payments on auto and home loans for a short time period, but there are consequences to stopping payments, such as repossession and foreclosure. These creditors may file for a relief from the Automatic Stay, especially if they believe your car is uninsured or your home is not being cared for. This allows them to continue attempts to collect payments from you. If you’re concerned about losing your car or home, staying up to date on payments will give you the best chance of keeping your property. Please let me know if you’re having trouble with this, so we can make a plan together.

Let’s Make a Plan

If you’re struggling to keep up with bills and calls from creditors are causing stress and anxiety, don’t put off taking action. Whether you’re able to work with creditors to modify your payments and reduce your overall expenses or you’re ready to file bankruptcy, the sooner you make a change, the sooner your stress will be reduced. I’d be glad to discuss your situation and options, so give me a call today.