When you are virtually drowning in debt, you are likely being harassed by bill collectors on a constant basis. Even though there are rules about when they can call and where, even those that follow the rules are aggressive and unrelenting. Once your debts age into certain categories, the actions that follow can make your life total chaos. You can put a full stop to most collection activities with a chapter 7 bankruptcy filing, so read on to learn more about the magic of the automatic stop.
No more phone calls and letters
Once you have filed your bankruptcy paperwork with the federal court, you will notice how quiet your phone seems to be. For those creditors who did not get the news, you may need to inform them about your filing and provide them with a case number and your bankruptcy attorney's contact information. If you listed a credit on your bankruptcy matrix, they must cease all contact with you with the filing.
No more struggling to pay the credit card minimums
Most Americans have a lot of credit card debt, and this is often the straw that breaks the camel's back when it come to making the bankruptcy decision. The good news is that credit card debts fall into that bankruptcy category known as unsecured debt, which means that it will likely be wiped out entirely. One of the most immediate benefits for you, however, is that you need never send another payment to any creditor listed on you bankruptcy.
No more worrying about a foreclosure or evictions (for the time being)
While the relief may only be temporary, you can heave a sigh of relief about losing a roof over your head with a bankruptcy filing. You must be aware of other factors when it comes to losing your home however. If you are behind your mortgage, you now have the opportunity to use some of the funds you were paying to the credit cards to bring it up to date. You should speak with your bankruptcy attorney before doing so, however, since you may still end up losing your home depending on:
- How much the home is worth
- How much you still owe on it
- What type of homestead exemption you can use
If you are about to be evicted, you ability to stay in your home a little longer depends on whether or not your landlord has already filed eviction proceedings against you.
To learn more about the power of the automatic stay, consult with your bankruptcy attorney.