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Automatic Stay a Powerful Weapon Against Creditors

One of the more frustrating things to endure during times of financial stress are the seemingly constant phone calls from creditors and the not-so-nice collection letters they send. The Automatic Stay component of a personal bankruptcy puts an immediate halt to all that noise. In fact, the Automatic Stay can stop a lot of things.

Automatic Stay at a Glance

The instant your bankruptcy case is filed with the court, you’ll receive an order that puts a stop to all communication between you and the creditors. The Automatic Stay also stops any procedures already in place, such as any legal action that has been taken against you, wage garnishment or levies against your bank account. The Automatic Stay can also buy you a little bit of time if you’re facing emergencies like eviction or utility disconnections.

  • Utilities: If you’re at risk of having your electricity, water, gas or telephone service disconnected due to being unable to pay the bills, the Automatic Stay will provide a buffer of at least 20 days before they can be disconnected.
  • Home Foreclosure: If your mortgage lender has foreclosed on your mortgage, the Automatic Stay will put a stop to the process – temporarily. We say “temporarily” because the lender will eventually be able to proceed with the foreclosure.
  • IRS Issues: While you will still be required to make arrangements to pay once your bankruptcy is over, even the IRS is powerless against the Automatic Stay.
  • Secured Debts (auto loans, etc.): Secured debts are ones that are associated with property that can be seized, such as a car loan. While the Automatic Stay will temporarily prevent the actual repossession of your vehicle, your bank may get permission from the court to repossess the vehicle before the bankruptcy proceedings begin.
  • Unsecured Debt (credit card debt, medical bills, etc.): Credit card companies and medical providers are prohibited from contacting you further once the Automatic Stay kicks in.
  • Loans: If you accepted a personal loan, the Automatic Stay prevents the creditor from contacting you. However – and that’s a big, however – if you accepted a business loan, the creditor is still free to contact you for collection.

If You’re Tired of Being Called by Collectors, Bankruptcy May Be a Good Option For You

The feeling of hopelessness is a common one among those who are experiencing crushing debt. If that’s you, bankruptcy may just be what the doctor ordered. Because no two situations are alike, you’ll need the expertise of a skilled bankruptcy attorney with the Oswalt Law Group. We encourage you to call our offices today at (602) 225-2222 for a free consultation.

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