What is an Automatic Stay?

“Bankruptcy” is a word that frightens many people. It has a stigma attached to it, which leads people to feel ashamed of filing. Unfortunately, this is an unfair stigma, as people have been filing for bankruptcy for a very long time, and in reality, bankruptcy is designed to help individuals get back on their feet following financial turmoil. Any number of circumstances can put a family in dire straights financially, such as job loss, serious illness, or divorce. Fortunately, there are experienced, compassionate attorneys out there who are willing to fight for those who need a helping hand. If you think it may be time to file, please do not hesitate to read on and learn more about your potential legal options moving forward:

How does the automatic stay work?

Essentially, an automatic stay will go into effect once you file for bankruptcy. From here, it will prevent all lenders and collection agencies from engaging in all collection activities, including wage garnishments, home foreclosures, repossessions, incessant phone calls, and more. 

How can an automatic stay benefit me?

An automatic stay is a humungous sigh of relief to many debtors, as collection agencies are known to menacingly threaten and harass debtors. This is unacceptable, and thankfully, an automatic stay gives families a chance to breathe and regroup. Additionally, when you declare bankruptcy, you are finally given a chance to discharge some of your debt and get your family back on their feet financially once again. 

Are there different types of bankruptcy?

Individuals may file for either Chapter 7 or Chapter 13 Bankruptcy. Essentially, a Chapter 7 Bankruptcy will grant you a discharge of your credit card debt, medical bills, personal debt, and more. Chapter 7 Bankruptcy allows you to keep certain assets as well. To file for Chapter 7 Bankruptcy, your family income generally must be less than the average family income in your county. A Chapter 13 Bankruptcy, on the other hand, is for families that have assets worth more than the average family income for their county. Essentially, you will make a 3-to-5-year plan with the Bankruptcy Court, allowing you to repay your unsecured creditors only what you can afford based on your income and expenses. Once this plan is completed, all your remaining debt is discharged.

Contact our experienced New York firm

Bankruptcy, for many people, is a frightening endeavor. Fortunately, with the help of an experienced attorney, it does not have to be. If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options. We will have your back every step of the way.