We are a debt relief agency. We help people file for relief under the Bankruptcy Code.

Mechanics and Benefit of the Automatic Stay in Bankruptcy

If you are facing overwhelming debt and the inability to pay your bills on a monthly basis, you may feel frightened and overwhelmed. During this time, you may be receiving non-stop calls from debt collectors or letters in the mail on a frequent basis attempting to collect on their valid debts. Many people will simply attempt to avoid their creditors by failing to answer the phone or throwing away their mail. However, if a person with overwhelming debt makes the decision to file for bankruptcy, they may not only receive a discharge of several of their debts, they will also receive an automatic stay during the bankruptcy process. Learn more about how an automatic stay in the bankruptcy process can help provide relief to debtors suffering from continuous phone calls and letters from debt collectors.

Understanding Bankruptcy

Both Chapter 7 and Chapter 13 bankruptcy provide ways for those experiencing overwhelming debt to have a financial fresh start. The main benefit of a Chapter 7 bankruptcy is the ability of the bankruptcy court to discharge certain debts. These debts often include consumer debts such as credit cards, medical debts, old taxes (in some cases), payday loans, and utility bills. While Chapter 13 bankruptcy does not typically discharge debt, it allows a debtor to create a repayment plan over three to five years that will allow a debtor to repay their debts with some financial breathing room.

Automatic Stay 

One of the main reasons that people file for bankruptcy is because they receive constant harassment and contact from creditors or debt collectors acting on behalf of creditors attempting to collect valid debts. These calls and letters and texts can become suffocating and overwhelming for a debtor. However, when a debtor officially files for bankruptcy with the court, creditors are put on notice that there is an automatic stay with respect to the debtor, which means that all creditor calls regarding debts must immediately cease. An “automatic stay” legally prevents any creditor from contacting a debtor regarding any debt until the bankruptcy is completed. This means that all phone calls, letters, e-mails, texts, communications, and even wage garnishments must be put on hold until the bankruptcy is finalized. If a creditor makes the decision to continue to contact you in any way while an automatic stay is in place, a debtor has the legal right to take them to court and file for damages against the creditor.

Contact an Experienced Libertyville Bankruptcy Attorney Today

If you are considering filing for bankruptcy due to the overwhelming debt you face along with the continued harassment from creditors, contact the experienced Lake County bankruptcy attorneys at Johnston Tomei Lenczycki & Goldberg LLC. We can help you understand your legal rights, and help ensure that they are protected. Call us today at (847) 549-0600 or email us at info@lawjtlg.com to schedule a free consultation.