Benefits of Automatic Stays in Bankruptcy
As soon as you file your bankruptcy, the federal court bars your creditors from collecting any debt from you until further notice.The state is issued automatically from the federal court, and it stops your creditors from contacting you about the repayments, sending you any emails regarding your repayment schedule, or even calling you in this regard.The time period of an automatic stay varies depending on the type of bankruptcy you choose.
Today, we will discuss the benefits of automatic stay when you file for bankruptcy. You can also consider it the automatic stays 101.
Benefits of an Automatic Stay
Automatic stairs are designed to provide you with the much-needed peace of mind when you are preparing to file for bankruptcy. As soon as you file for bankruptcy, automatic stay goes into action, and restricts any debt collection activity against you. Any violation of the stay by your creditor might result in penalties and legal action against them.
When you have an automatic stay against your creditors, the following activities cannot be done by them.
- They can’t repossess your vehicle.
- You are granted lenience in the tax collection process.
- No utilities can be disconnected.
- Creditor can’t contact or harass you regarding repayments.
Similarly, there are certain things which an automatic state cannot stop. For example, if there are certain criminal proceedings being initiated against you, or you are going through a divorce process, or you have to make payments for child support, you won’t be helped by the automatic stay.
Moreover, you’ll get it and can request the code to lift the automatic stay if they think that the state is not serving it’s purpose.
So, in order to avoid getting your automatic stay lifted, you must consult with an expert bankruptcy lawyer before taking any steps.