Dreading hearing your phone ring or checking the mail because you’re afraid of creditors demanding money can be a harrowing experience. The stress and anxiety that you feel because of these constant efforts can make your life seem more difficult than it should be.
Once you realize that you can’t pay those creditors and still keep up with your regular bills for life’s necessities, you may decide that bankruptcy is the best option that you have for financial stability. This decision provides relief from creditor collection efforts because the court issues an automatic stay when you file.
What is an automatic stay?
An automatic stay is a court order that forbids creditors from making contact to collect debts. They can’t call you, send written collection attempts, direct message you or send someone to knock on your door. This provides relief from the collection attempts for you, but that’s not the sole purpose of the order.
When you file for bankruptcy, there’s a chance that creditors won’t receive the full balance that’s due on your account. The bankruptcy court’s trustee collects the money associated with your case, if there is any, and distributes it to the creditors in accordance with a priority system. By issuing the automatic stay, the court takes away the possibility of creditors trying to circumvent that system.
The automatic stay is only one aspect of bankruptcy to consider as you make the decision about how to proceed. It helps to get legal guidance as early as possible to determine the best way forward for your specific situation.