How Bankruptcy Stops Your Creditors

If you are experiencing ongoing harassment from your creditors or your wages are being regularly garnished as a result of creditors, it may be wise for you to consider filing for bankruptcy. With the help of bankruptcy you can access an automatic stay which offers legal protection against your bill collectors.

As soon as you file for bankruptcy, you will receive a court order which is called an automatic stay. This stops any chance for a civil lawsuit that’s filed against you as well as any of the collection actions that have been ongoing. Automatic stay ensures that you have stated a compelling reason to file for bankruptcy. Automatic stay can help you regain control of your finances by preventing some of these issues:

Disconnecting your utilities:

If you are behind on your utility bills and the service company is threatening disconnection, an automatic stay will prevent the utility from disconnecting your service. It may even exempt you from paying the utility bill altogether.

Eviction:

Automatic stay can prevent eviction by giving you a few extra days to pay. A landlord can lift the automatic stay in order to evict you, but it can give you the option to find new housing in the meantime.

Foreclosure:

Filing for bankruptcy can put you on a 3 to 5 year repayment plan or give you a chance to sell your home in order to provide relief to your debts. Foreclosure is a much more severe penalty that will give you less control on when you must move out. Foreclosure also ensures you will not be keeping your home.

Wage garnishments:

Any type of garnishments that occur from your wages are no longer taken. You can have access to your full salary with the chance to discharge her qualifying debt on personal loans or credit card balances.

Automatic stay can work as an excellent method for reclaiming control of your finances but there are certain areas were automatic stay may not protect you. In the event of criminal proceedings, loans from a pension or multiple filings of bankruptcy you may want to consider contacting a bankruptcy attorney before you consider bankruptcy as a method for stopping your creditors.

This post was written by Trey Wright, a bankruptcy attorney in Tallahassee. Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.