Stop Creditors Cold with the Automatic Stay!
The minute your bankruptcy petition is filed, the the automatic stay goes into immediate effect and stops creditors from attempting to collect debts. No more harassing phone calls at all hours of the day, lawsuits must stop (even after they have a judgment against you), foreclosures must stop and garnishment must stop. Now you can breathe again.
Regardless of whether you are filing a Chapter 7 bankruptcy or Chapter 13 bankruptcy, the automatic stay is applicable to both chapters. The automatic stay is arguably your greatest weapon when filing bankruptcy because it is a way to immediately protect you from any further communication from your creditors.
The automatic stay is a court order that creates a temporary injunction that stops any further communication or attempts to collect debts by your creditors. It becomes effective once your case is filed with the bankruptcy court.
The automatic stay also means creditors can no longer proceed with:
- phone calls;
- collection letters;
- garnishments; and
- beginning or continuing lawsuits.
The automatic stay remains in effect until you receive your bankruptcy discharge. Your discharge is a permanent injunction forbidding your creditors from collecting discharged debts from you and replaces the temporary injunction created by the automatic stay.
A creditor may try to have the stat lifted, i.e. get court permission to resume collecting the debt, but this is at the discretion of the bankruptcy court and usually only granted if the creditor is a mortgage company and you are surrendering your home or a car lender if you are surrendering your car.
It is important to keep in mind that domestic support obligations such as alimony or child support typically do not fall under the protection of the automatic stay. Criminal proceedings against you are also not stopped by the automatic stay.
The automatic stay should be viewed as a form of protection from your creditors. If for any reason you were to be contacted by a creditor after your bankruptcy has been filed, then you would need to simply provide him or her with your case number. The bankruptcy court does this automatically after your case is filed but some creditors may, unknowingly, call if they have not yet received the official notice. If you don’t feel comfortable having to talk to the creditor, then simply let them know to contact your bankruptcy attorney’s office and your attorney or one of his staff members can also provide the creditor with the information needed. Generally speaking, it’s as simple as giving the creditor your case number over the phone if they were to contact you, but if they continued to ask questions for any reason, let them know all further communication should be directed towards your attorney’s office. There are penalties for creditors who violate the automatic stay.
Threatening phone calls and letters from creditors are what cause most people to be stressed and overwhelmed with emotion. When they stop, you can breathe again knowing a fresh start is near. We often hear clients say “this is when my fresh start actually began, when the phone calls stopped.” We work hard to get your case filed as quickly as possible for you and get you on your way to a new financial future.