If you’re dealing with overwhelming debt, you know it’s a terrible feeling. You may even feel like the worst part of the experience is being contacted by creditors who want you to pay them back. There are laws against abusive practices by debt collectors, but even if they’re abiding by the law, calls, letters and emails can be intimidating.
You may already know that by filing for bankruptcy under Chapter 7 of the U.S. Bankruptcy Code, you may be able to get rid of most types of debt within a few months, but did you know that it can stop all those calls, letters and emails from creditors even more quickly?
The automatic stay
After you file a petition for Chapter 7 bankruptcy, you get the benefit of something known as an automatic stay, which is intended to prevent most types of debt collection against you. Once you have filed, the court notifies your creditors. When the stay is in effect, your creditors generally may not contact you about the debt, file lawsuits against you over the debt or garnish your wages to repay the debt.
Note that there are exceptions to the automatic stay, and the stay does not last forever. Also, it’s important to remember that the fact that your creditors can’t contact you during the stay doesn’t necessarily mean that you won’t still owe the money.
That said, the automatic stay is one of the great advantages of personal bankruptcy. It can free you from harassing phone calls and other unwanted contacts from creditors, so that you can concentrate on getting out of debt and back onto solid financial ground.
