September 05, 2013 /24-7PressRelease/
-- There are many valid reasons to consider filing for bankruptcy
. When you are overwhelmed by debt, sometimes bankruptcy is the only way to climb out of a financial hole, get your life back on track and reestablish your credit.
Of course, even though filing for bankruptcy is a big decision, as with many decisions in life, sometimes it is the little things that mean the most. Being constantly hounded by creditors, receiving threatening phone calls and strongly worded letters; these things can take a heavy toll on your enjoyment of life and even your mental wellbeing.
If you want to stop debt collectors, bankruptcy provides a powerful tool that will get them off your back: the automatic stay.
Automatic stay is a judicial order prohibiting creditor action
An automatic stay is an injunction, or, in other words, a court order. It serves to halt collection actions from creditors. An automatic stay has the force of law, and creditors who continue to pursue any amount they may be owed in flagrant violation of an automatic stay can be sued. This means that if an automatic stay is in effect and a creditor tries to sue you to collect a debt or continues to contact you, you may in turn file suit against this creditor in an action to stop the harassment and potentially to collect monetary compensation from them.
As its name implies, beyond filing for bankruptcy, you do not have to take any further action to put an automatic stay into place. The automatic stay does not in and of itself discharge debts; it does, however, prevent creditors from pursuing any legal or collection activity in connection with debts that arose before the bankruptcy filing. In a Chapter 7 Bankruptcy after the automatic stay goes into effect your legal responsibilities to pay on most of your debts are discharged.
In a Chapter 13 Bankruptcy after the automatic stay goes into effect, most creditors only receive a partial repayment before debts are completely discharged in the ultimate disposition of the bankruptcy.
An automatic stay can help you save your home from foreclosure
In some situations, an automatic stay is particularly useful. For example, if you are facing foreclosure and wish to save your home, the automatic stay halts the foreclosure proceeding. Then, by proceeding with a Chapter 13
repayment plan you are able to reinstate the regular monthly mortgage payments and catch up on the missed payments over a three to five year period.
Contact an attorney today to explore bankruptcy
The automatic stay is just one of the many benefits that can be realized by filing for bankruptcy. Bankruptcy is not for everyone, but in certain circumstances, it can be the only way to get your financial life back on track. To learn more about what bankruptcy can do for you, get in touch with a bankruptcy attorney today.
Article provided by Bryan P. Keenan & Associates
isit us at www.attorneykeenan.com