When a person has filed for bankruptcy, an automatic stay will immediately be effective, regardless of whether it is a Chapter 7 or Chapter 13 bankruptcy. The effects of the automatic stay will be for all the creditors and this one-page document will be sent to them to inform them of your state of bankruptcy and to instruct them that they are no longer allowed to require payment from you. An automatic stay is very important in three situations: (1) being subjected to a lawsuit or foreclosure Sheriff’s sale date, (2) if your bank account is set to be seized, and if you’re garnished.
It will be your attorney’s duty to produce an automatic stay and send them to all of your creditors informing them of your bankruptcy. Any attempt of collecting any payment from you after they have received the automatic stay they hold them in contempt and possibly be fined by the federal Bankruptcy Court. In fact, any action that the creditors will do that may be a direct violation of the automatic stop will make them liable for contempt. The website of the Bradford Law Offices, PLLC of Fayetteville North Carolina states that the automatic stay is the most important thing when filing for bankruptcy because it not only stops the collection of payment from the creditors, it also prevents any further harassment from them. If the creditors still want to pursue you for your debts, they can file a motion that can get around the automatic stay that protects you during the bankruptcy case and proceedings. This is especially true during Chapter 13 bankruptcy, where you are still required to give payment to your creditor and you are not giving the required amount as agreed in the repayment plan.
In order to ensure that you are protected during and after your bankruptcy case, consider hiring a bankruptcy attorney in your area. This will protect your rights and guarantee that your case is properly filed and the automatic stay is effectively given to all your creditors to prevent them from collecting any payment from you. It is a very important document to have when you filed for any type of bankruptcy.Read More