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Automatic Stay is a protection given by the court to the debtor from its creditors. When in debt, the debtors are usually harassed by continuous collection calls along with other collection techniques from the creditors. However, once a person applies to file for bankruptcy under Chapter 7 or Chapter 13, an automatic stay is put into effect immediately. So until the stay is in effect, the creditors cannot contact you for collection and they will be paid off as per the rules of the chapter that you have filed under.
However, under certain circumstances, the creditor can request the court to lift the automatic stay, which the court may put into effect based on the exceptions to the automatic stay rule.
Therefore, it is of utmost importance that you consult an experienced attorney and take guidance from them before you file for bankruptcy so that they can protect you from the exception and guide you in the correct path. To get in touch with experienced attorneys in Los Angeles, you can book an appointment by logging in onto – 888-297-6203
An overview – How bankruptcy protects you from the creditors
Once you file for bankruptcy, all the lawsuits filed against you are automatically stopped, since the automatic stay goes into effect. This Stay protects you and your property from all lawsuits filed against you by your creditors, government entity, or collection agency. The stay protects you from –
- Foreclosure
- Eviction
- Losing basic resources like welfare, utility, and unemployment benefits
- Wage Garnishments
- Contempt (for failing to pay for child support)
- Losing Job