Immediate Debt Relief and the Automatic Stay
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Most people ask, “Will my creditors stop harassing me?” The answer is YES! Filing your bankruptcy petition instantly creates an automatic stay. The automatic stay is a federal order that prevents creditors from enforcing or attempting to enforce a claim against you during a bankruptcy case. The automatic stay does just what the name suggests — it automatically takes effect when you file your bankruptcy petition. While the automatic stay is in effect, creditors cannot call you, write threatening letters, garnish your wages, empty your bank accounts, cut off your utility service, or go after your car, house, or retirement plans.
Examples of actions by a creditor that would violate the automatic stay are:
- Filing a new lawsuit or continuing to press a lawsuit that had already been filed
- Sending threatening letters or making phone calls in an attempt to collect a debt
- Filing a lien against your property
- Refusing to issue a transcript of your schooling
There are exceptions to automatic stay protection including:
- Criminal prosecution
- Paternity proceedings
- Litigation to collect child support or alimony
- Some pension loans
- IRS audits are not stopped
While it may seem that you are drowning in a sea of debt, federal bankruptcy laws were designed to protect you from creditors, help you keep your home, give you a fresh start, and put you on the path to financial control.