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Automatic stay can stop creditors from harassing you

On Behalf of | Jun 25, 2024 | What Bankruptcy Can Do |

Are you anxious about answering phone calls and checking your emails due to debts? Consider filing for bankruptcy, a legal lifeline for those with tremendous financial woes. If you need breathing room in debt collection, bankruptcy’s automatic stay can help.

A legal protection from creditors

An automatic stay is a federal court order that prohibits creditors from taking any action to collect debt from you. It kicks in immediately upon filing bankruptcy. This means they can no longer:

  • Contact you about your debt, including phone calls, emails and USPS mails
  • File lawsuits against you to collect the debt
  • Garnish your wages
  • Repossess your car or other property
  • Foreclose on your home (in most cases)

Automatic stay, however, does not cover child support and alimony, criminal debts, administrative licensing cases, tax audits and eviction if the lease was terminated before bankruptcy.

But other than that, you can focus on dealing with the bankruptcy process without the constant pressure from debt collectors. This can be particularly beneficial if you are exploring options to reorganize your debts under Chapter 13 bankruptcy.

Not a permanent solution

An automatic stay’s protection typically lasts throughout your bankruptcy case only. There can also be instances where a creditor may request to lift the stay if you violate the terms of your bankruptcy agreement or if they have a legitimate reason to believe it is causing them undue hardship. This is why it is crucial to have a dependable bankruptcy attorney to guide you before, during and even after the case. They can explain the automatic stay in detail and advise you on how it applies to your specific situation.