How Does Filing for Bankruptcy Stop Creditors from Harassing You?
Dealing with aggressive creditors is one of the most overwhelming parts of financial difficulties for people. The threats or intimidation you receive every day are a real headache. From sleepless nights to daily anxiety, you might be at your wit’s end. If this is the situation you are in, bankruptcy may be the solution for you. The law is designed to immediately stop the creditor’s ability to harass you. Filing for bankruptcy will put an end to creditor harassment and help you take control of your debt.
How does bankruptcy law work to stop creditors from contacting you? The moment you file for bankruptcy, you can get what’s called an automatic stay. There is no need to go to court, and the process is not as difficult as you think. It stops phone calls and letters from most creditors, including credit cards, payday loans, personal loans, medical bills, IRS, and more. It will finally put you in control of your finances, instead of the creditors having control over you.
What Types of Debt do the Automatic Stay Cover?
All your creditors must stop contacting you immediately upon receiving notice of the bankruptcy.
It immediately stops wage garnishments and bank account levies.
It stops debt collection lawsuits.
It stops repossession and foreclosure.
It helps you avoid eviction costs.
It prevents your utilities from being shut off.
If you lost your driver’s license due to parking tickets, you can get your license reinstated through a Chapter 13 bankruptcy.
It stops the collection of an overpayment on social security, unemployment, and public aid.
It will stop student loan garnishments.
I prevents the IRS from garnishing you.
Please note a Chapter 7 bankruptcy and Chapter 13 bankruptcy cover different creditors. Please contact me for a complete evaluation to see which chapter is a better option for you.
What Types of Debts do the Automatic Stay not Cover?
The automatic stay does not cover certain types of debts, including the following:
It does not stop criminal proceedings.
It does not stop actions to collect or enforce on spousal maintenance, alimony obligations, or child support.
It does not cover 401k loans, retirement plan loans, etc.
It does not avoid adversary proceedings due to fraud or false pretenses.
If you have a recently dismissed bankruptcy, the automatic stay may be limited in time in your new case. Sometimes, the automatic stay does not apply at all, and you really need to extend or impose it. How? You have to file a motion. Choose a lawyer who has an extensive experience and in-depth knowledge in the legal profession.
Can your Creditors Get around the Automatic Stay?
In limited circumstances, the automatic stay may not apply or one of your creditors can ask the court to lift the stay to proceed with foreclosure or repossession.
For more information about filing for bankruptcy, please contact our office directly. Knowledge is power.