When Florida residents who are in financial distress are being bombarded with phone calls, threats of litigation and wage garnishments, the stress can be overwhelming. Filing for Chapter 7 bankruptcy not only begins the process of eliminating many of an individual’s debts, but also stops harassment by your creditors. Once the petition is filed, an automatic stay is put into place that halts all collection activity by creditors and provides filers with the breathing room they need to sort out their financial situation with the court’s help.
The automatic stay provides many advantages to a filer. If a Florida resident is in danger of having his or her utilities shut off, the automatic stay can prevent that from happening for at least 20 days. Foreclosure proceedings are also halted, at least temporarily, while the stay is in effect. People in danger of being evicted from a rental property could be given more time as well depending on the circumstances.
Wage garnishments and lawsuits are also stopped while the stay is in effect. Furthermore, depending on the type of debt being garnished or litigated, it could be eliminated through a discharge and stop these actions all together. However, some debts are not subject to discharge such as student loans, some tax debts and child support. A filer will remain responsible for these debts after the proceedings are concluded.
Many people end up in financial distress due to circumstances out of their control, and harassment by creditors can make the situation intolerable. A Chapter 7 bankruptcy can provide many advantages to a filer who is overwhelmed by debt, and the automatic stay is one of them. With harassment by your creditors stopped, you can focus on obtaining the debt relief that you need in order to move forward toward a more secure financial future.
Source: FindLaw, “The Automatic Stay: Stopping Creditors with Bankruptcy“, Sept. 8, 2016