What is the Automatic Stay?

An automatic stay is an injunction from the court that prevents your creditors from taking any subsequent action to collect debts. The automatic stay takes effect immediately after your bankruptcy petition is filed. The power of the automatic stay is truly felt by the debtor when the creditors stop calling and harassing them. This tool stops creditors in their tracks from any type of collection, foreclosure, lawsuits, judgments and wage garnishments. This in fact is what makes filing bankruptcy different from any other type of debt elimination. If a creditor decides to press the envelope and violate the automatic stay the individual filing for bankruptcy can call their bankruptcy attorney. The bankruptcy attorney can file a motion with the court and get sanctions against a creditor. Depending on how flagrant the violation is the creditor could face fines and even possibly monetary damages to the debtor. The bankruptcy court does not look highly on creditors that violate the automatic stay.

The ability to use the automatic stay is one of the top reasons why many people choose to file for bankruptcy. Many times, stopping the creditors can give the debtor enough time to get it together and possibly not lose everything. It’s common to see people filing bankruptcy at the last hour to stop foreclosure using the stay. Although it is not necessarily a permanent fix, it does buy the debtor quite a bit of time to make a more educated decision on financial matters with their bankruptcy attorney. The automatic stay is the most powerful tool a bankruptcy attorney has in their arsenal to protect the consumer.

Getting answers to those tough bankruptcy questions needs to be thought of before you make a decision when it comes to your financial problems. Finding the answers to help you understand your situation more clearly can help you make an informed decision about filing bankruptcy. Take a minute to call or fill out the form to have a FREE NO OBLIGATION CONSULTATION with a bankruptcy attorney in your area.