Filing for bankruptcy is a way that you can regain control of your finances. This is useful in many cases, such as if you have mounting medical bills, high credit card payments, job loss or a host of other reasons. While there are many benefits to filing, there is one that most benefits filers almost immediately after filing – the automatic stay.
When you file your case, the court issues an order to your creditors that prevents them from trying to collect the debts. This means that the phone calls, mailed attempts and any other efforts to get you to pay up must stop. You’ll be able to rest easier knowing that you won’t have to worry about these.
The automatic stay goes into place so that no creditor is treated preferentially over others. Since none of them can seek out payments from you, they’re left having to wait on the court to get the money they’re due. As part of the bankruptcy proceeding, each debt is assigned a priority level. Those that have a higher level are paid before others.
In most cases, creditors aren’t going to receive the full payment they’re due once you file for bankruptcy. Because of this, some creditors might attempt to get relief from the automatic stay. There are only specific instances in which they can do this, so find out if it’s possible before you file if you think that will have an impact on your decision about seeking the protection bankruptcy provides.
Before you file, you need to ensure that you’re able to meet the requirements of bankruptcy. The only way that your debts will be discharged is if you meet these completely.