The Benefits of an Automatic Stay in Bankruptcy

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Dealing with debt can be overwhelming, especially if you’re also experiencing creditor harassment. Many people don’t know that once a person files for bankruptcy, an automatic stay is set to protect them from creditors. An automatic stay will stop any lawsuits filed against you by your creditors or any other individual or agency seeking payment from you. Our Indianapolis bankruptcy attorneys explain other benefits of an automatic stay and how it works.

If you are facing overwhelming debt, contact our Indianapolis bankruptcy attorneys today at (888) 713-5148 to learn more about your debt relief options.

How the Automatic Stay Can Help You

If you are in a tough financial situation and you need to get it resolved immediately, an automatic stay could help you. Below we have put together a list of things an automatic stay can help you stop:

Stops Foreclosure

If the bank is starting foreclosure proceedings on your house, an automatic stay will stop the foreclosure temporarily after you filed for bankruptcy. Although it only puts a temporary pause on foreclosure, it could give you more time to find a permanent solution so that you can keep your home. Many individuals have applied for Chapter 13 bankruptcy to reorganize their debt to make it manageable--making it easier to make mortgage payments.

Stops Creditor Lawsuits

An automatic stay will also prevent creditors from continuing any collection activity, including attempting to fulfill your debt through a lawsuit. This includes lawsuits related to credit card debt, breach of contract, business financial dispute, and more.

Stops Evictions

Similar to pausing foreclosure, an automatic stay can also put a pause on eviction proceedings. However, if your landlord has already issued a wrongful possession judgment against you, the automatic stay won’t help your situation. If it does pause your eviction, it would only be for a few days or weeks until the automatic stay is lifted.

Stops Wage Garnishment

An automatic stay also stops all wage garnishments until the automatic stay is lifted. In most cases, this process is permanently paused because you filed for bankruptcy.

Stops Creditor Harassment & Collections

Once you file for bankruptcy, creditors won’t be able to contact you or seek debt collections. You won’t receive any more overwhelming creditor calls or requests to pay back your debt.

What an Automatic Stay Can’t Do for You

Although an automatic stay can pause my proceedings and buy you time to find a solution to your financial problems, there are many things an automatic stay can’t help you with. For example, an automatic stay can’t help you with IRS audits or tax debt. The IRS can still demand that you file a tax return and demand you to pay the taxes you owe.

An automatic stay also won’t stop a lawsuit against you regarding child support payments or other family law legal issues. Nor will it help you stop criminal proceedings.

Indianapolis Bankruptcy Attorneys

Our Indianapolis bankruptcy lawyers can help you begin your journey to achieve financial relief. We have helped millions of people across the country resolve their debt issues through bankruptcy and other debt-relief alternatives. We are devoted to providing compassionate guidance that can begin with a free bankruptcy evaluation. Secure our representation to observe the benefits of working with a caring lawyer who uses a personalized approach for each client's case. If you are dealing with overwhelming debt, we can provide you with compassionate guidance that can begin with a free bankruptcy evaluation.

Contact our Indianapolis bankruptcy lawyers today at (888) 713-5148 to schedule a consultation!

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