How Bankruptcy's Automatic Stay May Stop Foreclosure
Bankruptcy contains many parts, but one of the most powerful tools built into the U.S. bankruptcy code is what’s called the Automatic Stay.
The Automatic Stay is a court order that generally takes effect as soon as you file bankruptcy, whether it’s a Chapter 7 bankruptcy or a Chapter 13, and lasts for the entirety of your bankruptcy case.
The Automatic Stay freezes any and all collection efforts by your creditors for any debts. This means that the Automatic Stay is designed to stop:
- Foreclosure proceedings
- Wage garnishment
- Repossession efforts
- Lawsuits
- Phone calls from creditors
- Letters from creditors
These protections apply to most of your debts, not just those related with your mortgage.
While the protections of the automatic stay only apply during your case, by the time you emerge from bankruptcy your debts should be addressed in court, and your creditors must respect these rulings.
In other words, once a debt is settled through bankruptcy, your creditors may not try to collect. If they do, they will be in violation of the law and could be sued.
The Automatic Stay Can Help Protect Your House – and Let You Regain Control
Because the Automatic Stay is designed to protect you throughout your case, you should be able to focus on getting control of your debt instead worrying about stressful, harassing phone calls.
Right now, for example, you may be trying to figure out how to make your mortgage payment and your credit card payment, all while avoiding nasty calls from creditors.
But under a Chapter 13 bankruptcy, you shouldn’t have to worry about foreclosure or juggle the needs of multiple creditors. You would simply make one monthly payment to your bankruptcy trustee who would then deal with your creditors.
Throughout this process, you’d be protected by the Automatic Stay until you emerge from bankruptcy ready for a fresh start.
Stop Foreclosure With the Help of the Automatic Stay
Each year, huge numbers of people lose their homes to foreclosure. But it doesn’t have to be this way. There are tools available, like the Automatic Stay, which can help you keep your home.
If you’re ready to prevent foreclosure and take advantage of the Automatic Stay’s protection, speak with a local bankruptcy lawyer about starting the process. At this time you can ask questions and get a complete explanation of how the laws can help stop foreclosure of your home.
Fill out the free form on this page and we’ll connect you with a bankruptcy attorney near you who can help you get started.