If you have met with a lawyer to discuss your debt situation and found out that you qualify for Chapter 7, one important thing you should understand about this is the automatic stay you will receive when you file. Knowing and understanding what this involves is important in your case, and here are a few things that you should know about the automatic stay.
It is a court order
An automatic stay is something that everyone receives when filing for Chapter 7 bankruptcy, and it is also something that people receive when using Chapter 13 bankruptcy. The main thing to know is that the automatic stay is an order of the court, and the bankruptcy court is the court that will issue this order. They will issue it as soon as they receive your bankruptcy filing documents, and it is intended to stop all creditors from pursuing any form of collections from you.
It stops all creditors
When the court orders the automatic stay, they will send a letter to every creditor you list on your bankruptcy documents. When your creditors receive this notice, they are likely to fully understand what this means, as they receive these anytime a borrower files for bankruptcy. When they receive the letter, they will note your account and will be prohibited from contacting you in any way. This means that your creditors cannot call you, text you, email you, or send you letters. This order prevents them from pursing collections completely, and this is what gives you relief from creditor harassment through bankruptcy.
It is not permanent
While receiving the automatic stay is very helpful during a bankruptcy case, it is not something that will last permanently. Instead, it will end when your bankruptcy case closes. It will take time for the bankruptcy court to work through your case, and the goal of working through your case is to determine what to discharge. After the court makes this decision, they will let you know what debts they discharged and what debts still remain. They will then close your case. As soon as your case closes, the automatic stay ends, and any creditors that you still owe money to at this time will be free to begin pursuing you for payment once again.
The automatic stay you receive after filing will benefit you in many ways, and it is always important to fully understand how this works when filing for Chapter 7 bankruptcy. You can talk to a lawyer, like James Alan Poe, P.A., if you have questions about Chapter 7 or the automatic stay.