Tell Your Creditors To "Stay"
Posted on: 25 March 2018
You know when you've had enough of the phone calls and letters from the people you owe money to, and when it's time to take action by filing for chapter 7 bankruptcy. You are at risk of losing your home, having your utilities shut off and being sued unless you take action.
Fortunately, a federal filing contains a handy and timely tool, the automatic stay. Read on to learn about the benefits of this feature of bankruptcy and how you can get some fast relief from your financial troubles.
You get to keep more of your hard-earned money: You already know how much of your paycheck is going to make just the minimum payments on those credit cards, and once you file you can keep that money for other more important things. As soon as your paperwork hits the clerk's office, you can stop paying those credit card bills.
You can finally relax after a hard day's work: Creditors are allowed to call you, email you, and send you notices as long as they follow the rules. Unfortunately, you may still be contacted on a daily basis, and just one threatening phone call could ruin your leisure time. Once you file, no creditor is allowed to contact you, period. Do your part by listing all of your creditors on your bankruptcy paperwork, since you can still be financially responsible for any accidentally left off.
You can postpone foreclosure actions: Mortgages are in a unique bankruptcy category known as a secured debt. This means that there is an asset attached to the loan and that asset is your home. The mortgage lenders have the right to foreclose on your property, leaving you without a roof over your head.
The good news is that a chapter 7 federal filing puts a stop to all foreclosure actions, at least until your bankruptcy is final. You should understand, however, that penalties and interest will still accrue on your home loan.
You can stay in your rental home, maybe: If your landlord has already begun actions to have you evicted, you may have no choice in the matter. This is just another reason to take action fast when your finances become chaotic. If your landlord has not already filed paperwork to evict, you may gain some time to get caught up on your back rent payments.
To more about these and other benefits of the automatic stay, speak to a bankruptcy law office like Jeffrey S. Arnold, Attorney at Law, P.C.
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