The benefits of the automatic bankruptcy stay
Image Source: Flickr User Clint Budd
One of the biggest benefits of filing bankruptcy – either Chapter 7 or Chapter 13 – is the automatic stay that kicks in as soon as your petition is filed with the court. Since most bankruptcy petitions are now filed electronically, this can be done on the spot from your attorney's office – even on your first visit, so long as you bring all the needed paperwork. Here's a look at five ways the automatic bankruptcy stay can change your life for the better almost instantly – from the moment your petition is filed.
#1 All collection calls must stop
One of the worst things about being delinquent on debt payments is dealing with debt collectors. Many debt collection agencies are overly aggressive. They will repeatedly call, will phone at work even if they've been asked not to, will call over and over, and may even call outside of the hours they are legally allowed to contact you. This can make your life a living h*ll. All of this stops with the automatic stay. Any debt collector that continues to call you will face a fine for breaking the law.
#2 Most lawsuits must stop
If you have a creditor threatening to sue you for bad debt – or a lawsuit has already been filed – that must also stop. Credit card companies can get pretty aggressive when you don't pay up, and they like to sue. Homeowner's associations can also be quick to sue. As soon as your petition registers in the system, the automatic stay means creditors will have to forget about suing you and withdraw any lawsuits already filed. This protects your assets and bank account from judgments and liens.
#3 Foreclosure and repossessions are stopped
For those being threatened with the foreclosure of their home or repossession of their vehicle, filing either Chapter 7 or Chapter 13 also stops these actions immediately. With Chapter 13, you can catch up on back balances and with Chapter 7, you can wipe out other debts to free up money to devote to mortgage or car payments. The automatic stay can buy you time for a short sale of your house, to refinance, or to decide you want to give it up and rent instead – it's time to weigh your options.
#4 Your peace of mind is restored
Being deep in debt is stressful – this is true for most consumers that are delinquent on their bills. This can make it hard to focus on work, to enjoy your family or to have any quality of life. The automatic stay means instant peace of mind. You don't have to be scared of the ringing phone, getting collection calls at work that embarrass you or being scared to check your mail because of threatening letters. All of this is over with thanks to the instant protection of the automatic stay.
#5 You can focus on the future
When you're living paycheck to paycheck and are behind on bills, it's hard to think beyond the due date of your next bill. You can't save for the future or plan for it. That's no way to live. The automatic stay immediately puts a stop to the cycle you're trapped in and gives you the space to plan for the future. Whether you file Chapter 13 or Chapter 7, the automatic stay allows you to think beyond the next paycheck and start planning for your future – without all the financial stress you're dealing with now.
To find out more about how North Carolina bankruptcy can benefit you, contact the Law Offices of John T. Orcutt today. Call +1-919-646-2654 for a free bankruptcy consultation in Greensboro, Raleigh, Fayetteville, Garner, Wilson or Durham.