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Once you file for bankruptcy as a debtor, the clock is paused on nearly all efforts to collect your debt. This is what is known as the automatic stay. This is where you begin to get relief from the vicious cycle of debt in advance of the fresh start that happens after you emerge from Chapter 7. The automatic stay is one of the reasons why you file for bankruptcy in the first place.
The automatic stay takes control out of the hands of your creditors and puts it in the hands of the bankruptcy court. This means that the following things must stop happening:
There are penalties when your creditors violate the automatic stay. If someone does anything to collect during the automatic stay, any action that they took is void. In other words, if they repossess your car, they must give it back to you. Creditors can be sued for damages if you suffer any harm from their violation.
However, the automatic stay is not absolute. There are some exceptions that allow creditors to collect certain debts during the automatic stay. These include:
It is better to know before your bankruptcy filing exactly what creditors can and cannot do, so you are prepared. Your attorney will advise you about the automatic stay before you file as part of your initial consultation.
Harnage Law PLLC helps clients experiencing financial problems who are considering filing Chapter 7 bankruptcy. Call us today at 321.549.7886 or contact us online to learn about the fresh start that bankruptcy can give you when you are burdened by debt.
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