People who are in debt often tire of dealing with collection attempts from their creditors. These can make it stressful to check the mail, texts or direct messages. Even answering the phone or the door may invoke stress.
Once a person decides that they can’t afford to pay their debts and still keep up with other debts, they may want to find something to do about it. Bankruptcy might be the best answer for them. If they opt to file for bankruptcy, they’ll have the protection of the automatic stay.
What does the automatic stay do?
The court issues the automatic stay when the person files for bankruptcy. This means the creditors can’t contact the person using any method. It puts all creditors on a level playing field for bankruptcy because they aren’t allowed to circumvent the bankruptcy process.
They can’t attempt to collect debts in any form, which means they must rely on the bankruptcy process to determine if they will receive any money to cover the debt. In many bankruptcy cases, the creditors won’t receive the full balance due.
The automatic stay is only one of the benefits that come with bankruptcy. This is a legal way to reclaim their financial future and stability. Filing for bankruptcy also comes with some responsibilities for the filer, including credit counseling and debtor education. It may be beneficial for a person who’s drowning in debt to work with someone who understands bankruptcy so they can determine if this is the right option for them.