1-877-581-3396Submitted by the Bond & Botes Law Offices - Tuesday, February 7, 2023
If you’re struggling with overwhelming debt, filing for bankruptcy can provide relief and a fresh start. One of the most powerful tools available to consumers in bankruptcy is the automatic stay. In this blog post, we’ll explain what the automatic stay is, how it works, and why it’s an essential component of the bankruptcy process for consumers.
What is the automatic stay?
The automatic stay is a legal order that automatically goes into effect when you file for bankruptcy. It requires creditors to stop all collection activities, including wage garnishments, foreclosure proceedings, and lawsuits. The automatic stay offers a pause on debt collection and gives consumers in bankruptcy much-needed breathing room.
How does the automatic stay work?
As soon as a bankruptcy case is filed, the automatic stay is in effect. Creditors must immediately stop all collection efforts, including phone calls and letters, wage garnishments, and foreclosure proceedings. If a creditor violates the automatic stay, they can be held in contempt of court, and the consumer can seek damages.
Why is the automatic stay important for consumers in debt?
The automatic stay offers several benefits to consumers in debt. First and foremost, it provides immediate relief from harassing and stressful collection efforts. This pause on debt collection gives consumers the time and space to focus on their financial situation and make a plan for their future.
The automatic stay also offers protection for consumer assets. For example, if a consumer is facing foreclosure, the automatic stay will temporarily halt the proceedings and give the consumer time to work out a plan with their lender.
In addition, the automatic stay can provide a fresh start for consumers. By stopping collection efforts, consumers have the opportunity to reorganize their finances and develop a plan to repay their debts.
In conclusion, the automatic stay is a powerful tool for consumers in debt. It provides immediate relief from debt collection efforts, protection for consumer assets, and a fresh start for consumers to reorganize their finances. If you’re struggling with debt, contact the Bond & Botes Law Offices to explore your options and determine if bankruptcy is the right choice for you. We offer a free confidential consultation by phone, video or in person and will do our best to help you overcome your financial challenges.
