You likely know that the end goal of a consumer bankruptcy is the discharge of all of your qualified debts. However, did you know that filing bankruptcy can provide immediate stress relief, as well? When you file your petition, a court order automatically goes into effect called the “automatic stay,” which can be immediately beneficial to you and your household.
What Does the Stay Do?
The automatic stay is an injunction that prohibits any creditors from engaging in collection efforts for the duration of your bankruptcy case. This means that creditors must halt all of the following once they get notice of your bankruptcy filing:
- Phone calls
- Letters
- Credit reporting
- Lawsuits
- Wage garnishment
- Other judgment enforcement efforts
- Foreclosures
- Repossessions
- Evictions
If you’re behind on your bills, you know how stressful and even menacing collection efforts can be. This is especially true if you believe you’re in danger of losing your car or home in the near future. While the automatic stay will not permanently stop a foreclosure or repossession, it can give you a chance to rectify the default or come to another arrangement with the lender, such as a loan modification.
In some cases, a creditor will ignore the automatic stay and continue collection efforts. In this situation, your attorney can report the violation to the court, and a creditor may face penalties for violating an order, especially if there is evidence they did so deliberately.
Contact Our Los Angeles Consumer Law and Bankruptcy Attorneys
There are many ways that consumer bankruptcy can help people in California who are struggling with overwhelming debt. If you would like to discuss whether bankruptcy is a practical option for your situation, please call Martin & Bontrager, APC at 323.940.1700 or request a free consultation online today. We’re here to help you.
