Bankruptcy comes with plenty of benefits. One of them is the use of an automatic stay.
An automatic stay is a helpful provision in bankruptcy law that prevents collection agencies, government entities, creditors and others from trying to pursue money they say that you owe them. The automatic stay can help prevent a foreclosure or issues with wage garnishment as well.
Getting an automatic stay
The first thing to know about an automatic stay is that it’s actually automatic. It kicks in as soon as you file for bankruptcy. Once the stay is in place, creditors should stop calling you immediately.
If you get calls after the automatic stay is in place, or if you’re contacted in any other kind of way, then you should let your attorney know. They’ll get in touch with the agency or individual to let them know that you’re involved in a bankruptcy and that they should no longer contact you.
Can the automatic stay be released?
Normally, an automatic stay is not released until your bankruptcy is finalized. However, the automatic stay may be released sooner if your assets are likely to lose value before the bankruptcy is resolved. For example, if you own a business property that could become derelict as a result of not having money for maintenance during the bankruptcy, a creditor may have the ability to argue for the removal of the automatic stay.
An automatic stay usually stays in place until you resolve the bankruptcy, though. So, in most cases, you will not have to worry about having the stay removed, so you can focus on resolving your debt-related issues without calls or contact from creditors.
Does an automatic stay go into place with all bankruptcies?
An automatic stay is a part of both Chapter 7 and Chapter 13 bankruptcies. It’s smart to talk to someone about your legal rights and to take advantage of the automatic stay while it’s present. With the right plan, you may be able to move forward without further debt, so you can move forward with your life without having to worry about creditors calling you.