While people often fear filing for Bankruptcy, doing so can be very beneficial. It can prevent individuals from losing a home or business by restructuring their finances. Filing for Bankruptcy allows you a fresh start. During this process, the Bankruptcy Court enforces what is known as the Automatic Stay to aid debtors in their time of need. By applying the Automatic Stay, debtors are allowed a sense of relief while they work to rebuild their financial stability. It is important to contact an attorney to discover your options.
What is the Automatic Stay?
Dealing with financial situations can be stressful and worrisome. People often have concerns about the future of themselves as well as their family when they file for bankruptcy. This is why when individuals file for Chapter 7, Chapter 13, or business bankruptcy, the Automatic Stay comes into effect. This is beneficial for debtors because it allows them to work on their financial situation without worrying about banks or creditors coming to collect their assets. The Automatic Stay forbids all banks and creditors from any participating in any lawsuits, collection activities, and contact towards you. This may include collection calls/letters, bank restraints, foreclosures, repossessions, or lawsuits.
With this system in place, debtors will not have to face any harassment from the creditors they owe money to. Once an individual’s bankruptcy paperwork is completed and filed, the Automatic Stay goes into place immediately. This allows for a sense of ease as a debtor goes into restructuring their finances. They are then able to create a financial plan to prepare for the future without worrying about creditors hovering over them. Debtors are able to get the fresh start they need in order to plan for their future.
When individuals file for bankruptcy, it can be a frightening time in their lives. The benefits of the Automatic Stay often give debtors hope in a stressful situation. When it goes into effect, creditors are not able to contact the debtor or repossess any of their properties.
If a creditor breaks this order and continues to try and collect from the debtor while the Automatic Stay is in effect, they are violating the order. This may lead the Bankruptcy Court to enforce certain penalties towards the creditor. Any violation of the Automatic Stay rules may require the creditor to compensate the debtor. For example, if a creditor repossesses a debtor’s property while the order is in effect, they may be required to return the property to its owner. If a creditor is still taking part in collection activities when they are not allowed, it is crucial to notify an attorney or the Bankruptcy Court to request protection.
Contact our Firm
If you are filing for bankruptcy and seek the assistance of an experienced attorney, contact the Law Offices of Allen A. Kobler, Esq. today.
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.