What is "Automatic Stay?"
One of the worst things about being mired in debt is the constant harassment one receives at the hands of creditors and bill collectors. Fortunately, under section 362 of the United States Bankruptcy Code, most creditors must cease and desist all collection activities the moment you file for Chapter 7 or Chapter 13 bankruptcy. This is what's referred to as an "automatic stay," and it can be very helpful for anyone who's fallen behind on credit card payments, mortgage payments, rent, utility bills, etc. If you are struggling with debt and are tired of getting harassing phone calls at all hours of the day, filing for bankruptcy may be in your best interest. But before you take such a decisive step, it would be a good idea to speak with an experienced debt relief attorney who can go over all of the options available to you. For over two decades, the legal team at Nader & Berneman has been helping Southern California residents get creditors off their back for good. Speak to them for a free consultation by dialing (800) 568-0707.
What an Automatic Stay can Stop or Prevent
When you file for bankruptcy, an automatic stay will:
- Stop all wage garnishments, allowing you to take home your full paycheck.
- Prevent any government agency from taking back overpayment of public benefits.
- Temporarily stall eviction proceedings, giving you a few more days to come up with the rent.
- Temporarily halt foreclosure proceedings. If you wish to permanently keep you home, you’ll want to file for Chapter 13 bankruptcy as opposed to Chapter 7 bankruptcy.
- Prevent your utilities from being turned off or disconnected for at least 20 days - which is a long time to be without electricity or gas during the winter.
What an Automatic Stay Cannot Stop or Prevent
Unfortunately, an automatic stay cannot:
- Stop your wages from being garnished if you took out a loan against your pension.
- Prevent the Internal Revenue Service from auditing you, issuing a tax deficiency against you, demanding a tax return from you, or issuing a tax assessment against you.
- Prevent you from being ordered to pay child support.
- Protect you from certain criminal penalties. For instance, if a judge sentences you to six days in jail and fines you $1,000, you won’t have to pay the fine but will have to serve your time in jail.
An automatic stay is a good tool for getting creditors off your back, but there are still ways bill collectors can get around it. They may go to court and request that the automatic stay be lifted. This is why you need the representation of a seasoned bankruptcy attorney. Deciding whether to file for bankruptcy and what type of bankruptcy to file is one of the biggest financial decisions you will make in your lifetime. Don't make that decision alone. Contact Nader & Berneman for a free case evaluation and proper guidance by dialing (800) 568-0707.