When All Collection Activities Are Halted: Understanding More About the Automatic Stay

Hundreds of thousands of consumers in the US file for bankruptcy each year, struggling to maintain household debt but sometimes finding themselves to be no match against mounting household debt to include all the usual bills like housing, car, and credit cards—but today student loans pose a huge threat to the household budget  as well. A married couple may have $50,000 or more to pay back in student loans, along with trying to keep up with all the basic bills and get ahead at some point too.

Today, as over 45 million borrowers are laden down with $1.6 trillion in student loan debt around the US, student loans can be crushing enough to debilitate individuals of all ages; in most cases though, something even more extreme emerges to precipitate filing for bankruptcy, whether Chapter 7 or Chapter 13. You or your spouse, or a dependent, may have been involved in a serious accident, and left with a long and debilitating recuperation (also leaving you unable to work), or you may have fallen ill. Other issues may develop at the same time such as loss of a job or hours, separation from a spouse or divorce, or other personal crises that do not help when finances are already fragile.

If you have been struggling, chances are debt collectors are calling morning, noon, and night. You may be living in fear of losing your home, your car, and other valuable assets. Bankruptcy offers the reward of finding yourself, ultimately, on a new path to financial freedom, and also offers the protection of the automatic stay as soon as you file, in most cases.

The automatic stay is a court injunction that stops (or stays) most collection activities; for example, debt collectors must stop calling, repo men must stop in their tracks, and even process servers cannot touch you during this period. Whether you are filing for Chapter 7 or Chapter 13, the automatic stay protects you, giving you enough time to figure out how you want to handle some details of your bankruptcy. You may or may not want to keep your home or car, and with time to breathe and consult with your attorney, you can decide without anyone breathing down your neck. An experienced attorney can explain to you how the automatic stay will work in your case.

You probably have many questions about bankruptcy, from wondering how much you will have to sacrifice (very little in most cases), to whether you will have to go to court. Pre-planning may be in order also if you have a tax refund on the way or other assets that must be protected. Speak with a skilled bankruptcy attorney from the offices of H. Lehman Franklin, P.C. Call now to learn more at 912-764-9616, or contact us online.