If you’re considering filing for bankruptcy and live in Greenville, NC, you might come across a term called “automatic stay.” It sounds complicated, but it’s actually a helpful tool for anyone going through tough financial times. In this post, I want to explain what an automatic stay is, how it helps, and some important things to keep in mind.
What is an automatic stay?
When you file for bankruptcy, something really cool happens right away. It’s called an automatic stay. This is like a big stop sign that tells all your creditors (the people you owe money to) that they have to pause. They can’t call you, send you letters, take you to court, or try to take away your things or your paycheck until your bankruptcy is sorted out. Please read Defending Your Rights: What You Need to Know About Creditor Harassment Laws in Bankruptcy
The automatic stay works for almost all the money you owe, whether you choose to file Chapter 7 or Chapter 13 bankruptcy. But, just like most rules, there are a few exceptions. For example, the automatic stay won’t stop criminal cases, child support payments, some tax stuff, or if you decide to give back something you bought on credit, like a car.
Usually, in a Chapter 7 case, this automatic stay lasts until your case is finished and your debts are wiped out. In a Chapter 13 case, it stays the whole time you’re working on paying back your debts through your plan.
The Benefits of the Automatic Stay
An automatic stay can really benefit you and your family while you start the bankruptcy process. You get to have instant peace, time to think and keep your stuff. How is that all possible your may ask? Let me briefly share.
Instant Peace: Right when you file for bankruptcy, the automatic stay gives you a break from creditors. This means no more stressful calls or letters while you figure things out.
Time to Think: With everything on pause, you have time to look at your finances calmly and decide the best way to move forward. You can talk to a bankruptcy lawyer to see if Chapter 7 or Chapter 13 is better for you, or maybe find another way like fixing your debt without filing bankruptcy.
Keeping Your Stuff: The automatic stay also means that your stuff is safe. Your car and home can’t be taken by creditors while you work through your bankruptcy.
With all things there are exceptions Unfortunately, there are situations where an automatic stay does not apply.
When the Automatic Stay Doesn’t Apply
While the automatic stay is super helpful, it doesn’t cover everything. Here are some things it won’t stop:
– If your landlord already won a case to evict you, you might still have to move.
– It doesn’t stop criminal cases.
– It can’t stop you from having to pay child support or alimony.
– The IRS can still audit you and make you pay certain taxes.
Sometimes, a creditor might ask the court to let them start collecting money from you again. This can happen if they prove that waiting for the end of your bankruptcy would be really unfair to them. Each case is different, so talking to your lawyer is a good idea if this happens.
To recap, the automatic stay is a big help when you’re dealing with bankruptcy because it stops creditors from bugging you and lets you figure out your next steps without extra stress. If you live in Greenville, NC, and are thinking about bankruptcy, knowing how the automatic stay works can give you a bit of comfort and help you plan better.
If you have questions or need help with your bankruptcy, it’s smart to talk to a lawyer who knows all about these rules. I can help you with that. Simply fill out the contact form, and let’s start giving you some peace of mind.