As you feel your debt piling up and getting out of control, the last thing you want to think about is a creditor or collection agency harassing you for money. Although creditors are supposed to be bound by the law and only attempt to collect debt through restricted and formal methods, there are plenty of stories of creditor harassment and persistence become a nightmare for debtors. If you have found yourself in the same situation, it might be time to consider filing for bankruptcy, not just for the monetary relief but also the stress relief provided by automatic stays.
What is an Automatic Stay?
The moment you file for bankruptcy, either Chapter 7 or Chapter 13, an automatic stay is created to block you, your property, and your finances from most creditor actions. That is why it is called automatic, it happens without you needing to really do anything beyond your initial filing.
Automatic stays are powerful and are often the final incentive for people to actually file for bankruptcy. If your utilities are being disconnected, an automatic stay could buy you around 3 weeks of extra utilities while you sort everything out. If your home mortgage being forced into foreclosure, an automatic stay can delay the process; the same can be said about evictions. If your wages are being garnished, you can expect an automatic stay to completely shut down the garnishment, possibly for good.
What Can an Automatic Stay Not Do?
Many people filing for bankruptcy see automatic stays as the heroes they are, providing them breathing room and time to get their lives back together. But every hero has their weaknesses.
An automatic stay will likely be defenseless against the Internal Revenue Service (IRS) and most tax actions that they have already filed against you; it could, however, prevent them from making new tax liens and property seizures while your bankruptcy is active. Automatic stays also give way to child support and alimony payments, which will remain intact even after you have completed your bankruptcy. Any civil penalties you are forced to pay due to a criminal conviction may also be exempt from an automatic stay’s influence but similar criminal fines could possibly be excused.
Understanding & Using Automatic Stays
Creditors are allowed to try to remove or weaken your automatic stay through their own means – usually filing a complaint with the court that issued it. If you want to ensure that it stays in one piece and protects your finances, you need to protect it with the assistance of Belsky, Weinberg & Horowitz LLC and our Baltimore bankruptcy attorneys. Contact us today to learn about how we can help you understand your rights as someone filing for bankruptcy and set you down the right path to a comfortable life after bankruptcy.