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What is the ‘automatic stay’ and how can it help you?

People who are struggling with out-of-control debts often put off filing for bankruptcy for a number of reasons. One of the main reasons is the belief that they will lose everything to their creditors.

Most people filing for bankruptcy don’t realize that they are actually seeking bankruptcy protection, which means breathing room from creditors and collection agencies. This is where the “automatic stay” provision of any bankruptcy filing comes in.

Whether you are here in Pennsylvania or any other state, the automatic stay will go into effect when you file for bankruptcy protection. The automatic stay will stop any lawsuit seeking to collect debts that you owe in its tracks. That means the automatic stay will:

  • Prohibit creditors from contacting you with harassing phone calls or letters that threaten you with repossession or other serious consequences
  • Stop collection activities before they can seize your car or any other valuable asset
  • Stop garnishments that take important money out of your paycheck or bank accounts
  • Stop foreclosure proceedings and allow you to stay in your home and catch up on back mortgage payments
  • Prevent utility companies from disconnecting your service, including water, gas and electricity

The automatic stay will not stop actions related to unpaid child support or some actions taken by the IRS with relation to unpaid taxes.

How long does the stay remain in place?

The automatic stay remains in place while you are going through the bankruptcy process. If you filed for Chapter 7 bankruptcy protection, the stay will likely only be in place for a period of six to nine months. If you are in a Chapter 13 bankruptcy repayment plan that lasts for three to five years, you will be safe from creditors for that entire time. However, there are several factors that determine whether you will be able to seek Chapter 7 or 13.

Additionally, some creditors will also try to take legal action to get around the automatic stay. Some may also try to harass you in defiance of a court order, counting on you to not be aware of your rights. This makes working with an experienced bankruptcy attorney essential. At the Quinn Firm, our lawyers will protect your rights and stick by you throughout the entire bankruptcy process to help you get the fresh financial start you need. You can call our office in Erie at 814-806-2518 to get started.

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