How the Bankruptcy automatic stay can help you

For anyone experiencing the burden of high credit card debt (or other kinds of debt), finding a way out can be an incredibly stressful problem that can wreak havoc on your family life and health. Is there any light at the end of the tunnel?

Well, one legitimate option that you should consider if you simply can’t pay all your bills is bankruptcy. The automatic stay provision in bankruptcy prevents creditors from trying to collect a debt after you have filed for bankruptcy.

Automatic stay is one of the most powerful and reassuring provisions of bankruptcy. Once you file for bankruptcy, there is an automatic court order which prevents companies from taking any further action against you until your case is resolved. Creditors cannot repossess your car, or begin foreclosure proceedings on your house, or try to garnish your wages through your employer.

Believe it or not, the creditors are not even allowed to contact you once you have filed for bankruptcy. If they do, they’ll have to answer to the judge and will probably have to pay fines as a result. Now, you still have to go through the bankruptcy process, of course.

You should understand that the automatic stay is a temporary procedure that gives you some breathing room when dealing with bill collectors. However, you have to go through the entire process to see what the outcome of your bankruptcy case will be. At the very least, the automatic stay gives you some temporary relief while you and your bankruptcy lawyer make your case.

One thing you may be worried about is whether the new bankruptcy law makes you ineligible to file for bankruptcy. The truth is that most people who would have qualified previously are still eligible to declare bankruptcy.

Your bankruptcy lawyer can explain some of the specifics such as having to undergo credit counseling and attend financial management classes as a requirement for bankruptcy. When it’s all said and done, bankruptcy is still an option for many people to consider in order to achieve a fresh financial start.

It’s true that the process is more involved now with the new bankruptcy code, but it is still a viable option for many Americans to consider. Your best bet is to learn as much as possible about bankruptcy from more articles like this one and then speak to a bankruptcy lawyer.