What is the Automatic Stay in Bankruptcy?
As some people consider whether or not to file bankruptcy, one of the factors which sways certain individuals in the direction of filing is the automatic stay. It’s a powerful resource to have at your disposal, and swiftly provides important forms of relief.
So what is the automatic stay in bankruptcy? The automatic stay is a mechanism which kicks in as soon as you file bankruptcy, which serves to immediately stop many of the actions being taken against you. This includes lawsuits filed against you, as well as actions taken by creditors, collection agencies and government entities.
One of the most useful aspects of this is that the automatic stay stops the foreclosure process and also can force the return of recently-repossessed vehicles as well as recently garnished wages or bank accounts . Further, the automatic stay stops wage garnishments and allows you to keep more of your hard earned money. The mechanism has other positive outcomes as well, but these two are generally the most frequently sought out measures.
Of course, the automatic stay doesn’t solve everything you may be facing. It’s important to fully understand what can be prevented or halted, what can’t, and how all of this will play out when and if you file for bankruptcy.
The automatic stay also shouldn’t be the only factor which you’re considering in terms of whether or not to file bankruptcy. While it certainly is a powerful resource to have, there may be alternatives you can pursue, such as direct negotiations or loan modifications.
That’s why experienced legal assistance fighting on your behalf is so very important. Further, if you do file bankruptcy, it’s important to file the correct form – Chapter 7, 11 or 13 – which best suits your needs.
If you’d like more information or are considering filing bankruptcy, then contact Goren & Tucci by calling our office at 301.718.1892. We’ll be happy to answer any questions and get started discussing your case, and how the automatic stay may be able to help you depending on your specific circumstances.