Getting a fresh financial start can be helpful to the millions of people who file for bankruptcy every year. If you are struggling with debt, filing a Chapter 7 or Chapter 13 bankruptcy can be a viable solution to a problem that may seem insurmountable. You are not alone in this task. Not only can debt be either wiped out, as in a Chapter 7 bankruptcy or scheduled out into manageable sums, as in the Chapter 13 bankruptcy, but it can also help your day-to-day life with the benefits of the automatic stay.
An automatic stay is an injunction that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy. Under section 362 of the United States Bankruptcy Code, the stay begins at the moment the bankruptcy petition is filed. An automatic stay can be especially advantageous if you are at risk of being evicted, being foreclosed on, being found in contempt for failure to pay child support, or losing such basic resources as utility services, welfare, unemployment benefits, or your job (because of a raft of wage garnishments).
Essentially, the stay is in place to prevent creditors from trying to collect any property that now belongs to the bankruptcy estate or could be exempted under the law. If creditors or collectors do not stop or continue to harass a debtor after a stay is in place, they may be in violation of the Fair Debt Collection Practices Act.
The automatic stay can halt the following types of actions:
- Harassing collector phone calls, letters and emails from collection agencies
- Vehicle repossessions
- Evictions and foreclosures
- Wage garnishments
- Disconnecting utilities
- Limited tax actions
There are some instances that the automatic stay does not benefit the debtor however, and those should be noted as well.
- IRS Tax audits – depending upon the case
- Child Support or Alimony Payments
- Criminal Proceedings
- Loans from a pension
If you have questions or are looking for an experienced bankruptcy attorney call Levine Law to set up a meeting today.