Automatic Stays Simplified

When going through the bankruptcy process there are many things that you need to be aware of. For most people, one of the most important is the automatic stay that gets put in place. An automatic stay is a key point in US bankruptcy law that basically says that creditors (including collection agencies and even governmental agencies) must immediately stop all attempts to collect the money they are owed while the case is going through the bankruptcy process.

Are All Types of Debt Covered by an Automatic Stay?

No. Certain types of debt have been made exempt from the automatic stay. This will include child support debt, IRS tax debt, and loans from pensions. If you have these types of debts, you may still get contacted by them. Make sure your bankruptcy attorney is aware of these debts so it can be factored into your overall bankruptcy strategy.

When Does the Automatic Stay Begin?

This protection begins the moment that you file for bankruptcy. Of course, it may take a short amount of time for your creditors to become aware that you have entered the bankruptcy process. If you receive a call from a creditor or collections company after you have filed for bankruptcy, simply inform them that you have taken this step and they are legally obligated to stop all debt collection activities.

How Long Does the Automatic Stay Last?

An automatic stay will remain in place until your bankruptcy case has been discharged. In almost all situations, the discharge of the bankruptcy will either involve eliminating the debt entirely or having a new payment arrangement put in place. If you had your debt discharged, the creditors may not attempt to collect it ever again. If the debit was reorganized in some way, the creditors can only attempt to collect the debt according to the new arrangement.

Other than Collections Calls What Protections does This Provide?

In addition to stopping creditors from calling you and sending you letters related to your debt, an automatic stay will also prevent or halt any attempts to foreclose on your real estate, repossess your vehicles, or reclaim any other collateral you may have to secure debts.

What Should You Do if Collectors Do Not Stop?

While rare, there are some situations when a collections agency or other creditor will continue to try to get payments even after the automatic stay is in place. After you have notified them once that you are in bankruptcy (ideally either in writing or on a recorded line), you should immediately notify your bankruptcy attorney. Your attorney may be able to take actions against that creditor that could include discharging the debt you owe entirely, or even leveraging fines against them. At the very least, however, an attorney will be able to get the courts to force the creditors to stop their harassment.

End the Harassment with Bankruptcy Today

If you are tired of the constant harassment from creditors and collections agencies, bankruptcy may be the ideal solution. Bankruptcy laws are on the books specifically to provide consumers with the protections they need. Do not hesitate to contact us to discuss your options and learn how quickly we can have the automatic stay put in place for you.