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  • Writer's pictureDaniel Rodriguez

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:

  1. 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.

  2. 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.

  3. 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.

The Automatic Stay Is Only One Aspect of a Comprehensive Bankruptcy Plan It is essential to note that by itself the automatic stay will only provide temporary relief. IN order for the debt and financial situation to be fully resolved, it is highly likely that the individual will need to obtain a Chapter 7 or Chapter 13 bankruptcy discharge. A bankruptcy discharge is granted at the completion of a bankruptcy filing. Generally, all debts and liabilities must be included in a bankruptcy petition to receive a discharge. Debts that are mistakenly not included in the petition will not be discharged and thus the debt situation would remain. Therefore it is essential to take a meticulous and painstaking approach to all bankruptcy filings. However, provided that all dischargeable debts are included and the filer meets all other requirements, The discharge will eliminate or wipe away all eligible debt. Thus, while the automatic stay provides immediate relief, it is the bankruptcy discharge that resolves the underlying root of the problem.

Work with a Sacramento Bankruptcy Attorney in California Today Facing a constant stream of creditor calls can make a difficult debt situation feel unbearable. Bankruptcy can provide both short-term and long-term relief from serious debt problems. To schedule a confidential consultation with an experienced bankruptcy attorney, call The Bankruptcy Group at today.

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