When credit card debt becomes overwhelming and you're tired of the harassment from the creditors, then it sounds like you're in a position to file personal bankruptcy.
The minute you file personal bankruptcy with the court, the automatic stay is put in place that will stop all collection activity by your creditors.
Even if your mortgage company is in the process of foreclosure the automatic stay will temporarily stop that.
In a nutshell, bankruptcy stops the creditors from collecting and makes them prove to the court that you do owe them what they say.
The court then decides who and what gets paid.
The "Automatic Stay" is what makes filing bankruptcy king.
The stay makes bankruptcy a very powerful tool.
If an individual is in foreclosure and being evicted or if their utilities have the possibility of it being shut off, the stay will stop all actions against the debtor until the court approves it.
Creditors are aggressively pursuing debtors with a vengeance.
They are now suing the debtors and getting judgments against them, so any funds that become available, the creditor will go after them.
After getting a judgment, if the debtor is employed, the creditor will pursue wage garnishment.
Many debtors that couldn't afford to pay their bills previously, with their wages being garnished, will no way be able to afford to even live.
This is a perfect example of why a personal bankruptcy filing can stop everything and allow a debtor to say timeout.
Since a wage garnishment in the bankruptcy code is considered a collection of proceeding, it must stop immediately.
If a creditor continues to garnish wages after the bankruptcy is filed it will be a violation of the automatic stay, which could result in damages against the creditor.
If a person is in the process of filing bankruptcy and their employer gets served with a wage garnishment they should immediately call their bankruptcy attorney to have it stopped.
Bankruptcy's automatic stay is like an invisible shield from a sci-fi movie that surrounds you after filing bankruptcy.
Under 11 USC 362 of the bankruptcy code, this powerful shield will start immediately after filing and last until the discharge.
The only way the stay can be lifted by the creditor is filing a motion with the court for relief from stay.
They will need to show proof of ownership of the property and the reason for why the stay should be lifted.
The only time the court will hear this motion is when it's secured property, such as a house or a car.
There are a few instances under the new bankruptcy code where the automatic stay could be extended, but the debtor will have to show how circumstances have changed to need it.
One of the reasons the bankruptcy code was changed in 2005 was to stop people from abusing the system.
Prior to the 2005 changes, there were some people that would file bankruptcy to stop a foreclosure or stall it when they had no intention of paying the debt to begin with.
This is why it's important to have good communication with your bankruptcy attorney if there have been any changes along the way of the bankruptcy filing.
Be upfront with the bankruptcy attorney if there are plans to change jobs, let your house or vehicle go in the personal bankruptcy, or changes to the budget even.
Finding a bankruptcy attorney that you trust and get along with will be invaluable.
Take the time and interview a few to find a good match.
The minute you file personal bankruptcy with the court, the automatic stay is put in place that will stop all collection activity by your creditors.
Even if your mortgage company is in the process of foreclosure the automatic stay will temporarily stop that.
In a nutshell, bankruptcy stops the creditors from collecting and makes them prove to the court that you do owe them what they say.
The court then decides who and what gets paid.
The "Automatic Stay" is what makes filing bankruptcy king.
The stay makes bankruptcy a very powerful tool.
If an individual is in foreclosure and being evicted or if their utilities have the possibility of it being shut off, the stay will stop all actions against the debtor until the court approves it.
Creditors are aggressively pursuing debtors with a vengeance.
They are now suing the debtors and getting judgments against them, so any funds that become available, the creditor will go after them.
After getting a judgment, if the debtor is employed, the creditor will pursue wage garnishment.
Many debtors that couldn't afford to pay their bills previously, with their wages being garnished, will no way be able to afford to even live.
This is a perfect example of why a personal bankruptcy filing can stop everything and allow a debtor to say timeout.
Since a wage garnishment in the bankruptcy code is considered a collection of proceeding, it must stop immediately.
If a creditor continues to garnish wages after the bankruptcy is filed it will be a violation of the automatic stay, which could result in damages against the creditor.
If a person is in the process of filing bankruptcy and their employer gets served with a wage garnishment they should immediately call their bankruptcy attorney to have it stopped.
Bankruptcy's automatic stay is like an invisible shield from a sci-fi movie that surrounds you after filing bankruptcy.
Under 11 USC 362 of the bankruptcy code, this powerful shield will start immediately after filing and last until the discharge.
The only way the stay can be lifted by the creditor is filing a motion with the court for relief from stay.
They will need to show proof of ownership of the property and the reason for why the stay should be lifted.
The only time the court will hear this motion is when it's secured property, such as a house or a car.
There are a few instances under the new bankruptcy code where the automatic stay could be extended, but the debtor will have to show how circumstances have changed to need it.
One of the reasons the bankruptcy code was changed in 2005 was to stop people from abusing the system.
Prior to the 2005 changes, there were some people that would file bankruptcy to stop a foreclosure or stall it when they had no intention of paying the debt to begin with.
This is why it's important to have good communication with your bankruptcy attorney if there have been any changes along the way of the bankruptcy filing.
Be upfront with the bankruptcy attorney if there are plans to change jobs, let your house or vehicle go in the personal bankruptcy, or changes to the budget even.
Finding a bankruptcy attorney that you trust and get along with will be invaluable.
Take the time and interview a few to find a good match.
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