Making the Most of Your Right to an Automatic Stay

Immediately after filing for bankruptcy, you can let out a sigh of relief for the first time in a long time― finally you will catch a break from your creditors!  One of the fundamental protections for debtors in the bankruptcy process is the automatic stay, which provides a much needed break from the relentless collection efforts of ruthless creditors.  An automatic stay is an injunction― essentially, the court bars further attempts at collection and can impose judicial punishments for disobeying the stay. Although some exceptions apply, creditors must cease their attempts to collect debts from you or face sanctions.

One of the great features of the automatic stay is that is truly automatic. It kicks in before your creditors even know about it.  Take note: it will take some time (usually no more than ten days) for the court to get out notice, and so some creditors may continue to call until they receive the notice. Once the court tells your creditors that you have declared bankruptcy, however, creditors have to desist from any collection attempts, and must immediately cease any judicial proceedings against you, including foreclosure proceedings. If any of your creditors violate the injunction, you may be able to collect damages!

There are a few steps you can take to make the most of your right to an automatic stay following your bankruptcy filing. First, acquaint yourself with the exceptions so that you don't run into any nasty surprises. Next, be careful as you are preparing your bankruptcy paperwork. As part of the filing process, you will need to provide your attorney the name and address of any and all creditors who may have a claim against you. Your attorney will ask for recent correspondence from creditors to ensure the proper contact address is used to notice the creditor.

Once you have filed, it may be a good idea to tell some of your creditors you have done so, namely any who are likely to take immediate action. If you file and a creditor takes action before getting notice of the automatic stay, you will be able to get your stuff back, but at the cost of your time, money and patience. It's probably not a good idea to tell any of your creditors that you are filing for bankruptcy until after you have done so, particularly if you are behind on payments: they may try to repossess your property before bankruptcy protection has kicked in.

The automatic stay is a powerful benefit of your bankruptcy filing. Speak with an experienced bankruptcy attorney today to find out how to stop the bill collectors, stop the repo man, and stop a foreclosure through bankruptcy.

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Call the Law Offices of John T. Orcutt, (toll free) +1-833-627-0115, to set up a free, confidential debt consultation. Visit www.billsbills.com for more information. Serving North Carolina residents.