Being contacted by creditors is a stressful experience for most people, so trying to get them to stop is often a priority. The situation is even worse for someone who doesn’t have the ability to pay anything on those debts and recognizes that they likely can’t pay them off.
If you’re in that position, you may wonder what options you have to stop the harassing phone calls, letters, and messages. One possibility is filing for bankruptcy. When you take this step, it triggers an automatic stay, which stops creditors from contacting you.
Why is the automatic stay important?
Creditors in a bankruptcy case usually don’t get a full payout of the balance due on an account. By issuing the automatic stay to prevent them from trying to collect money from you, the court puts them all on the same level. It removes their ability to circumvent the court-ordered repayment priority system.
The automatic stay covers several collection activities besides demands for payment. It also stops the creditors from being able to initiate or continue a lawsuit and halts wage garnishments. It can stop foreclosures, repossessions and some evictions.
There are some legal actions that aren’t impacted by an automatic stay. These include child support, alimony, criminal fines, tax cases and retirement account loans.
Exploring your options for bankruptcy may help you to decide if this is the right option for your needs. It can provide you with a fresh financial start so you can rebuild as you see fit. Working with someone familiar with this matter is beneficial because they can walk you through the benefits, as well as your rights and responsibilities.