How bankruptcy’s ‘automatic stay’ can shield you from debt collector harassment

On Behalf of | Feb 24, 2021 | Uncategorized

As anyone in the Cleveland, Tennessee, area who has gone through it can tell you, being deeply in debt is a stressful experience. Debt collectors call you and send letters virtually every day wanting payments you cannot afford. Your credit card balance might be growing while you are barely able to pay the interest — if you are lucky. Then there are the sleepless nights spent wondering what you can do to put this terrible time behind you.

Either Chapter 7 or Chapter 13 bankruptcy might be the option for yourself and your family to end the debt cycle and start fresh. Filing for bankruptcy has one immediate benefit: the automatic stay.

How the bankruptcy automatic stay helps people in debt

An automatic stay is an order issued by the bankruptcy judge that pauses all collection efforts and lawsuits filed against you by creditors, collection agencies and government entities. It also halts any garnishments that may currently be on your wages. Most of the time, the stay remains in effect until the debtor’s bankruptcy proceedings are finalized, though in some cases, creditors with secured debts can get a court order to lift the stay on the security assets, such as a piece of real estate.

Having the automatic stay protecting them can be a huge relief for people going through bankruptcy. It gives them time to focus on getting out of debt without worrying about harassment from debt collection agencies or losing their house. If a creditor willfully violates the terms of the stay, the debtor has the right to sue for damages. That fact can make creditors and debt collectors think twice about trying to contact you.

Letting you take advantage of bankruptcy

While the automatic stay is in place, you can use the bankruptcy process to regain control over your finances. An attorney who focuses on personal bankruptcy can be your guide and advisor throughout the proceedings.

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