Bill Collectors Won’t Stop Calling? Bankruptcy’s Automatic Stay Can Stop Creditor Calls
The Automatic Stay Stops Most Creditor Calls and Letters Regardless of whether creditors and collections agency representatives are attempting to collect on alleged debts via phone, mail, or other means, the automatic stay can put an immediate end to most attempts. The automatic stay is set forth in 11 USC Section 362. The automatic stay prohibits most attempts to collect on alleged debts including “the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of the case under this title.” Essentially, the automatic stay requires creditors to pause their collection attempts while the matter is brought under the purview of a bankruptcy court. The automatic stay can provide benefits for an array of concerns including:
Stopping foreclosure – The automatic stay through an emergency bankruptcy filing is often a key step in stopping a foreclosure. A Chapter 13 bankruptcy petition can allow you to keep your home and provide additional time to catch up on mortgage arrears.
Stopping eviction – In certain situations, bankruptcy’s automatic stay can stop an eviction from a home. However, the stay is often brief and landlords can take action to get a court to lift the stay.
Stopping utility shut-offs – Bankruptcy’s automatic stay can also provide relief from threatened shut-offs of gas, water, or electricity. It is not always appropriate to file bankruptcy to stop a utility shut-off and other relief may be available, but it is an important potential tool to be aware of. While the relief provided by the automatic stay is not permanent, it is typically extremely welcome. The automatic stay is an immediate, albeit temporary, benefit that helps bankruptcy filers achieve a fresh financial start.