People who need to file for bankruptcy are often dealing with frequent contact from creditors. This can be stressful and disheartening, especially for those who know they need to pay their bills but simply don’t have the ability to do so.
If you’re in this position and considering filing for bankruptcy, you should take a moment to learn about the automatic stay. This is a court order that’s issued when you file for bankruptcy.
What does an automatic stay do?
The automatic stay prevents creditors from contacting you in an attempt to collect money. This means that they can’t send you mail or text messages. They aren’t allowed to call you or send someone to your home to try to get a payment. This can provide you with the space you need to focus on the bankruptcy and getting your finances in order.
An automatic stay is also issued to help keep the bankruptcy process fair. When a person files for bankruptcy, it’s highly unlikely that their creditors will receive the full payment they’re due. The automatic stay prevents them from trying to circumvent the payment process in a way that would get them extra money.
There are limitations to an automatic stay. For example, it typically won’t apply if someone was engaging in fraudulent activity or if they had another bankruptcy within a certain amount of time.
The automatic stay is only one factor to consider if you’re thinking about filing for bankruptcy. This legal process comes with certain protections and responsibilities, so it’s critical that you learn about those before you file. Working with someone who’s familiar with the process might be beneficial.
