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What is the automatic stay and how can it benefit you?

On Behalf of | Aug 23, 2017 | Bankruptcy

When your debt issues begin to result in threats from creditors and other consequences, you know you need a way out of your current situation, fast. Like other Tennessee consumers, you may be unsure of how to deal with your debt in a reasonable way, but bankruptcy could be the right choice for you.

In addition to providing you with a way to deal with your debt, filing for bankruptcy enacts the automatic stay. The automatic stay essentially stops all contact from creditors, including any legal actions efforts currently against you, such as repossession and more. This is one of the main benefits of filing for bankruptcy, and it can bring much needed peace of mind to your life.

The many benefits of the automatic stay

When the automatic stay goes into effect, several things will happen. Creditors will no longer be able to contact you, and therefore, all phone calls, letters and other means of contact will stop. This protection will also do the following:

  • Keep your utilities on: Debt problems can actually result in the utility company turning off your power, telephone and other utilities. The automatic stay can keep them on up to 20 days, giving you time to catch up.
  • Stop the eviction process: In some cases, filing for bankruptcy may be able to halt the eviction process if it is already underway.
  • Make wage garnishment stop: Any garnishment of your wages will stop while under the automatic stay, and it will remain halted throughout the bankruptcy process.

Debt collectors and collections agencies must immediately stop all contact with you and must also refrain from any further efforts to collect on your owed balances. The automatic stay will go into effect with either Chapter 7 or Chapter 13 bankruptcy. You will remain under its protection until the bankruptcy process is complete.

The benefits of bankruptcy

Bankruptcy may not be your first choice, but it could be an optimal way by which you can deal with most or all of your debt in an effective manner. While under the protection of bankruptcy, you can follow the terms of your bankruptcy plan without the disruption or stress of constant harassment from creditors, wage garnishment and more.

If a creditor continues to contact you after the automatic stay is in effect, it is a violation of your rights, and you could have grounds for legal action against that creditor. When overwhelmed by debt and overrun by creditors and debt collectors, you may find it beneficial to learn more about the benefits of bankruptcy, including the automatic stay.


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