What is the automatic stay, and what does it mean for you?

On Behalf of | Dec 23, 2022 | Bankruptcy |

One of the most difficult aspects of owing a significant amount of debt is the amount of contact you will receive from debt collectors and creditors. After just a few missed payments, you may find yourself receiving numerous phone calls, letters and other types of contact from people who are trying to get you to pay. This can be daunting and intimidating for overwhelmed consumers, causing additional stress for you and the entire family.

If you are struggling with debt and its consequences, you may feel that there is no good way out of your current situation. In reality, there are options that will allow you to both address your debt problem and make the collection efforts against you stop. By filing for bankruptcy, you can achieve a better financial future, as well as enjoy the benefits of the automatic stay.

The benefits of filing for bankruptcy

The automatic stay is one of the benefits you may enjoy when you file for bankruptcy. This goes into effect immediately, stopping all contact with creditors and debt collectors. They may not contact you for payment, send you letters, continue foreclosure proceedings or garnish your wages once the automatic stay goes into effect. If a creditor or debt collector violates the automatic stay, you will have grounds to pursue legal action. The automatic stay offers you protection and reprieve while you follow the terms of your bankruptcy plan.

Certain types of debts are not eligible for protection under the automatic stay. Child support and alimony payments are still expected, even after filing for bankruptcy, and you will still owe back payments for these two financial requirements regardless of the status of your case. The automatic stay will remain in place for as long as the bankruptcy process lasts, but creditors can petition the court to allow them to collect certain debts or make efforts to recoup their financial losses.

Your bankruptcy options

Bankruptcy may not be your first choice, but it could be the right way forward for a better financial future. The automatic stay is just one of the multiple benefits of this legal option available to Tennessee consumers. If you are behind on your payments and seeking a way address your debt problem once and for all, it may be helpful to discuss this option with an experienced professional who can provide knowledgeable insight regarding your options.


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