Many people often fear filing for Bankruptcy. However, it can be very beneficial. Filing for Bankruptcy can give individuals a fresh start. It has the potential to prevent people from losing a home or a business by restructuring their finances. When someone files for Bankruptcy, the Bankruptcy Court activates what is known as the Automatic Stay. This assists debtors when they are vulnerable and working through their finances. When the Automatic Stay is put into effect, debtors are provided with a sense of relief while they work towards financial stability. When filing for Bankruptcy, it is important to contact an attorney to guide you through the process.
What is the Automatic Stay?
When an individual struggles with their finances, it can create very stressful situations for them. Filing for bankruptcy can trigger concerns about their future as well as the future of their family. It is for this reason that the Automatic Stay comes into effect when Chapter 7, Chapter 13, or business bankruptcy is filed. This helps debtors because it gives them the chance to work on their financial situation without banks or creditors collecting their assets. The Automatic Stay forbids banks and creditors from participating in any lawsuits, collection activities, and contact with the debtor. Collection activities can include calls/letters, bank restraints, foreclosures, repossessions, or lawsuits.
When the Automatic Stay is in place, debtors should not face any harassment from those they owe money to. The Automatic Stay is enforced immediately after bankruptcy paperwork is completed and filed. This allows the debtor a sense of ease as they begin to restructure their finances. They are then able to create a financial plan without collectors bothering them. Debtors can then plan for their future without stress.
Violating the Automatic Stay
Filing for Bankruptcy can be a frightening time in an individual’s lives. The benefits that the Automatic Stay provides allow debtors a sense of hope during a difficult time. When it is enacted, creditors are not allowed to contact the debtor or repossess any of their assets.
If a creditor does not follow the orders of the Automatic Stay and harasses a debtor, they can be held in violation. These actions may lead the Bankruptcy Court to enforce certain consequences. Violations may require a creditor to compensate a debtor for their actions. For example, if a creditor repossesses a debtor’s property while the Automatic Stay is in effect, they may have to return the property. If a creditor is still taking part in collection activities, it is important to contact an attorney or the Bankruptcy Court for protection.
Contact our Firm
If you are filing for bankruptcy and seek the assistance of an experienced attorney, contact The Radol Law Firm today.
Before taking any sort of legal action, it is important to discuss your legal matter with an experienced attorney. Contact The Radol Law Firm to discuss any divorce and family law matters you may be faced with.