When your bankruptcy attorney files your chapter 7 bankruptcy paperwork for you, multiple wonderful events occur at the same time. While you might be thinking that the main wonderful event is that deep sense of relief, you would only be partially correct. The automatic stay is a legal order that is included with the bundle of bankruptcy documents, and the effect it brings to certain actions by your creditors is chilling. Read on to find out how to experience power over those you owe money to.
The Filing Shifts Control
In an instant, your filing simultaneously sets several legal events in action. One action that few filers ever seem to realize is that the bankruptcy courts are now completely in charge of your financial situation. They use the powers and regulations of the bankruptcy code to decide how your debt situation is to be resolved. While you may continue to buy groceries and gas, almost all other aspects of your finances come under the scrutiny of the courts. That means you cannot use your credit cards any longer and that your other debts like auto loans and mortgage payments should be paid only with the permission of your bankruptcy attorney.
The Filing Sends a Message
Another change manifested by the order is a stoppage (known as a stay) of all debt collection activities. The means creditors take to make your life miserable up to this point was virtually limitless, but the automatic stay tells creditors to stop contacting you completely. They cannot call you, come to your home or work, email you, text you, or send any correspondence to you.
The Filing Puts an End to Court Cases
If you have let things get so far that creditors are suing you in court, the bankruptcy filing puts a stop to that. Unfortunately, if the court has already ruled on a previous case, you may still be on the hook for some debts. Speak to your attorney to find out more about completed cases. If the court judgment resulted in wage garnishment, those will be stopped with a bankruptcy filing.
The Filing Freezes Utility Shut-offs
The automatic stay keeps your electricity, water, landline phone, and heating on for 20 days after the filing. After that, you will need to pay the utilities or face further action. Since you are not having to pay your other creditors, like credit card bills, you will likely have more funds available to get your utilities caught up.
Other debts like taxes, child support, or student loans may be unaffected by the automatic stay. Speak to a lawyer like C. Taylor Crockett, P.C. for more information.