One of the most disheartening things to go home to after a hard day at work is a bunch of collection demands in your mailbox, inbox or voicemail box. It’s difficult to have to deal with the constant reminders that you owe money but can’t make the payments, despite working so much.
Filing for bankruptcy is one option that you have to reclaim control of your finances. This is a legal way to take care of these debts so you can have a fresh financial start. Once you file, the collection attempts will stop because the court issues an automatic stay.
Why must collection attempts stop?
Debts that are included in a bankruptcy case aren’t usually fully paid off, so creditors won’t be able to collect everything that’s owed once the bankruptcy is discharged. The automatic stay prevents creditors from trying to circumvent the bankruptcy process in an attempt to collect more money than they should collect.
Since you won’t have to deal with creditors’ collection attempts, you can turn your focus to reestablishing your financial footing. As part of the bankruptcy process, you’ll have to go through credit counseling and a debtor’s education course. Both of those can provide valuable information that you can use as you work on tasks, such as building your budget, which is much easier when you don’t have to stop to field collection attempts.
The automatic stay shouldn’t be the only reason you file for bankruptcy, but it is an important part of the process. You need to understand the rights you have and the responsibilities you must uphold in your case, and legal guidance can help.
