Contrary to popular belief, filing for Bankruptcy can be beneficial for individuals. Filing for Bankruptcy can give individuals a fresh start. It has the potential to save people from losing their home or business through the restructuring of their finances. When an individual files for Bankruptcy, the Bankruptcy Court enforces what is called the Automatic Stay. This helps debtors in their time of need. When the Automatic Stay is put into effect, debtors are provided with some relief while they work towards financial stability. When going through the process of filing for Bankruptcy, it is important to contact an attorney to understand the options available to you.
What is the Automatic Stay?
Financial struggles have the power to create very stressful situations for people. When a person files for bankruptcy, it can trigger concerns about their future as well as the future of their family. This is why when Chapter 7, Chapter 13, or business bankruptcy is filed, the Automatic Stay comes into effect. This is a great help to debtors because it gives them the opportunity to work on bettering their financial situation without worrying about banks or creditors collecting their assets. The Automatic Stay prohibits all banks and creditors from taking part in any lawsuits, collection activities, and contact towards the debtor. Collection activities may include calls/letters, bank restraints, foreclosures, repossessions, or lawsuits.
With the Automatic Stay in place, debtors do not face harassment from the establishments they owe money to. The Automatic Stay goes into place immediately after an individual completes and files their bankruptcy paperwork. This provides the debtor with a sense of ease as they go into restructuring their finances. They are able to create a financial plan without creditors hovering over them. Debtors are able to have the fresh start they need to plan for their future.
Violating the Automatic Stay
When a person files for bankruptcy, it can be a daunting time in their lives. The benefits of the Automatic Stay provide debtors with a ray of hope during a trying time. When it goes into effect, creditors are not allowed to contact the debtor in any way or repossess any of their assets.
If a creditor fails to follow the orders of the Automatic Stay and continues to harass the debtor, they can be held in violation of the order. Doing so may lead the Bankruptcy Court to enforce penalties towards the creditor. Violating the Automatic Stay may require a creditor to compensate the debtor for their wrongdoing. For example, if a creditor repossesses any properties of a debtor while the Automatic Stay is in effect, they may be required to return the property to the debtor. If a creditor is still participating in collection activities, it is crucial to contact an attorney or the Bankruptcy Court for further protection.
Contact our Firm
If you are filing for bankruptcy and seek the assistance of an experienced attorney, contact Velasco Law Office today.
Juan C. Velasco, Esq. is a trusted attorney who concentrates on bankruptcy, family law, real estate, and estate matters who has been serving the New Jersey area for over 20 years. If you are in need of experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.