The automatic stay in bankruptcy is perhaps the single most important provision of the bankruptcy laws that stops creditors from attempting to collect debts – immediately.
A Powerful Tool
The automatic stay in bankruptcy is a tremendously powerful tool available to all people who file a bankruptcy petition. Whether you are filing Chapter 7 bankruptcy or Chapter 13 bankruptcy, It is one of the biggest benefits available for all people who file bankruptcy and the reason many people choose bankruptcy over any other method of resolving debt issues.
How Quickly Can I Be Protected By The Automatic Stay?
The automatic stay goes into effect immediately when a person files with the bankruptcy court. If you have a judgment against you and the creditor is threatening to levy your bank account or garnish your wages, that stops immediately.
The Automatic Stay and Foreclosure
Many homeowners have been able to stop foreclosure because of the power of the automatic stay. If there is a Sheriff’s sale scheduled to sell your home, the automatic stay in bankruptcy will stop the sale immediately.