When someone is being sued concerning debt or is facing a foreclosure or repossession, time can be of the essence. All too often, this firm sees hardworking people that are put in an impossible financial situation after experiencing a wage garnishment, a bank account levy, or a repossession. These collection actions—especially a wage garnishment—can make a bad situation a very serious one. This is where one of the most powerful components of bankruptcy can help: the automatic stay.
The automatic stay is a federal court order that stops collection activities through the pendency of the bankruptcy unless the creditor gets special permission from the court. This stay stops lawsuits, active or pending garnishments, repossessions, foreclosures, and even the harassing phone calls and visits. It is called the “automatic” stay because it automatically goes into effect once someone files for bankruptcy. Because the underlying debt is many times discharged in the proceeding bankruptcy, meaning you are no longer legally liable to pay this debt, the automatic stay is many times the end to the lawsuit or garnishment.
Sometimes, it can be a race to get to the automatic stay, such as in cases of a master commission’s sale or a creditor placing a lien against real property that bankruptcy may not be able to address. Although a lot of information must be gathered for our firm to properly complete a bankruptcy petition, emergency filings are also available that only include basic information. If you are facing a situation like these and would like to talk about your options, give us a call today and we can explore what may make sense in your specific circumstance.
