Knowing you’re in debt and can’t make your payments is stressful enough, but adding letters and calls from creditors on top of it all can be overwhelming. The calls may come at inconvenient times, and you may feel pressured to commit to a payment that you simply can’t make.
It’s easy to begin feeling defeated when you see no way out. Your creditors may be willing to set up a payment plan for you and give you time to get up to date. Some other companies may send you directly to collections or may even file a lawsuit against you. The good news is, there is hope through bankruptcy. Filing will immediately stop creditors from contacting you as you wait for your debts to be discharged.
Motion for Relief
As soon as your paperwork is submitted to file bankruptcy, the automatic stay begins. This means that creditors may no longer contact you in attempts to collect the debt that you owe. This also puts a hold on any legal action they may have been taking. The automatic stay generally only applies to debts that will be included in your bankruptcy. Including medical bills, credit cards, rent, utilities and your mortgage or auto loan. If you want to keep your car or home, however, you’ll need to get up to date on these payments. This will also temporarily stop some types of wage garnishments.
If these creditors do contact you after filing, let them know that you’ve filed bankruptcy and give them my contact information and your case number. I’ll make sure they have any other information they might need.
Other Considerations
The automatic stay does not apply to all types of debts and court proceedings. Alimony and child support are priority debts that must be paid in any type of bankruptcy. It may be possible to have these payments modified or reduced to better fit your current financial situation. Your bankruptcy will have no effect on court proceedings related to paternity, child visitation, or taxes.
While the automatic stay does apply to secured debts, such as your car payment or mortgage, this is only a temporary situation. If you’re behind on payments or don’t have the property insured properly, the court could grant a relief from the automatic stay to your creditors. This would allow the creditors to move forward with their collection efforts, which could include repossession or foreclosure.
Taking Action
The automatic stay is an immediate benefit of filing bankruptcy, but its primary purpose is to give you a temporary reprieve in order to either get caught up on payments or include those debts in your bankruptcy. When we meet, we’ll create a customized plan to take care of your debt and preserve your property. I’ll ensure that you’re always informed about your responsibilities and what to expect next.