What is the Bankruptcy Automatic Stay
When you file for bankruptcy you have automatic stay, which is a injunction where creditors have to stop trying to collect debts from you. The automatic stay is to protect and buy you time against pressing debts, while your awaiting your bankruptcy discharge.
This means upon filing for bankruptcy the automatic stay will come into effect and provide these assistance to you:
- Creditors can no longer harass you with non stop phone calls
- Creditors can no longer send you harassing letters in the mail
- Will temporary stop any foreclosure on you home
- It will stop any creditors lawsuits against you
- Stop repossession on your property
- You can stop your utilities: water, gas electric, from being shut down, for 20 extra days
- Stop any wage garnishment, child support or alimony
The automatic stay will in effect until
- the debtor receives a discharge, the automatic stay will then be replaced with a permanent injunction still prohibiting the creditors from the above actions
- the item of property is no longer property of the estate; exempt property
- a judge lifts the stay due to the request of a creditor
There are a few things that are not covered in the automatic stay such as; criminal proceedings, actions for a family support order, actions to collect support that is not property of estate and tax audit, demand for tax returns or assessment of tax.
So the automatic stay has can provide relief for a lot of your financial stresses, while you await your bankruptcy finalization and you receive a discharge. Also you have the ease of mind that anyone, like creditors, who knowingly violates the automatic stay, will be liable for damages caused by their violations and has no legal effect.
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