The protection available to you when you file bankruptcy is immediate and automatic. The moment you file, whether it is a Chapter 7 or a Chapter 13 bankruptcy case, the court places you under it’s protection. Both your income and property are completely sheltered from any creditor seeking to repossess, foreclose, garnish, or seize them. The court refers to this as “The Automatic Stay”. Any and all collection attempts against your income or your property must stop. If a lawsuit has been filed, it must cease. If a judgment has been issued and a subsequent Writ of Garnishment has gone out, it must cease. If the repossession order has gone out, efforts must cease. If the foreclosure date has been set, it must cease. Also, creditors must stop calling you, sending you letters, calling your family, etc. The Automatic Stay is known as “the protection that halts any and all creditor collection activity”. For more reasons why you may not want to wait, click here. Bankruptcy was created to protect you, your income, your family, and Continue reading
As soon as you file bankruptcy, an “Automatic Stay” goes into effect and stops all collection activity against you. This happens automatically the second your bankruptcy is filed. All creditors must stop trying to collect from you. They must stop doing anything to get money from you; this includes making calls, sending letters, and filing lawsuits. An automatic stay will also stop foreclosures, repossessions and sales of property from moving forward. Now, if you don’t pay your house notes the mortgage company would have the right to start the foreclosure up again after your bankruptcy case is finished.
There are some important exceptions to the automatic stay. It may not give you protection from some types of domestic support actions and it will not protect you from criminal charges made against you.
The automatic stay is temporary for secured creditors. They must get permission from the court before taking any action. Bankruptcy does not allow you to keep property that is security for a loan without making payments on the loan. You don’t get anything for free. If you don’t pay, a secured creditor may get court permission to seize and sell the property.