The automatic stay is an important tool in bankruptcy proceedings. With the automatic stay, individuals claiming bankruptcy can be protected from facing harassment from creditors. After the bankruptcy paperwork is filed, creditors are barred from contacting debtors. This can help ease the stress of debtors since they will not have to face constant reminders of the debt they owe. Instead, they can focus on controlling their finances and creating a plan. This can then help them to focus on their situation and prepare them for a better financial future.
What bankruptcy processes is the automatic stay involved in?
Individual bankruptcy proceedings, including Chapter 7 and Chapter 13, involve the automatic stay as part of the process. Upon filing all the necessary paperwork, the automatic stay goes into effect and helps ease the stress of these individuals. Although the automatic stay is involved in both processes, these bankruptcy proceedings are not the same process. Their goal is to prepare the individual for a better financial future, but they do so in different ways. They both operate to better prepare the individual for a stable financial future. With the automatic stay, individuals can focus on this aspect.
What happens after it goes into effect?
The individual continues with the bankruptcy process once the automatic stay goes into effect. During Chapter 7 bankruptcy, liquidation will occur to fix the situation that the debtor is facing. All non-exempt assets will be liquidated to pay back creditors as much money as possible. This can help to cover the debt. Although it may not be able to meet up to the amount you owe, it can still erase debt.
Chapter 13 bankruptcy functions differently than Chapter 7 bankruptcy because it involves making a repayment plan. Individuals can work with a professional attorney to come up with a repayment plan. This repayment plan can help to fix their financial situation and prepare for a better future. Through this process, individuals are allowed to keep their possessions while still paying back their creditors. They must attend the bankruptcy court to get the repayment plan approved. Then it will be set in motion and depending on the plan, it will take a designated amount of time to pay off.
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.