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If you become overwhelmed by your debts and unable to pay them off, creditors will typically begin calling and writing demanding payment. Not only can this be very intimidating, but can also be seen as harassment. While bankruptcy is primarily used as a tool to help people get rid of their debts, it also includes a provision to prevent your creditors from taking collection actions against you. Learn more about this useful provision below.
How it Works
The automatic stay is put in place as soon as the bankruptcy papers are filed and will prevent any collection actions against debtors on their property. The automatic stay stops foreclosure actions, repossessions, creditor harassment (including telephone calls and written letters), lawsuits over unpaid credit card debts, etc.
Halting Your Creditors
The automatic stay halts your creditors in every way. Whether they attempt to repossess your car if you fall behind on payments, or even threaten to shut off the utilities in your home, the automatic stay will make sure those actions won’t occur.
Along with repossessions and utility shutoffs, this provision will also protect against wage garnishments. This happens when your creditor takes a portion of your paycheck directly from your bank account, sometimes without warning, to pay your debts.
Lastly, the automatic stay is able to put a stop to foreclosures. If your home is at risk of foreclosure, or you have fallen severely behind on your mortgage payments, filing for bankruptcy can put a stop to the foreclosure proceedings. Chapter 13 bankruptcies, in particular, are especially adept at stopping foreclosure by restructuring the filer’s existing payment plan to make it more affordable.
Get in Touch With Our Team Today
As seen above, the automatic stay provision holds a number of advantages for bankruptcy filers. If you are looking to file for bankruptcy, enlisting the help of the experienced legal team at The Law Offices Of Mayer & Newton can help make for a smoother and more efficient process.
If you are looking for a way to get your creditors off your back and find financial freedom, get in touch with our qualified team today through our online contact form or give a call at to schedule your free consultation.