“Bankruptcy represents a longstanding commitment in this country to helping people get a fresh start. This principle has never been giving only certain people a fresh start.”– Tim Johnson
For the person having financial trouble, there’s a constant loss of money. As each month passes, they tend to fall farther and farther behind. Have you ever been in a situation where you don’t have any money, but the rent has to be paid? The cell phone payment is due and you’ve just received notice that your car is about to be repossessed? How will you have enough money to pay for your child’s daycare while you’re at work? How will you get to work without a car? Sometimes the same creditors will call multiple times in one day. You can’t have peace in your own home because the phone keeps ringing. If you answer the phone, the bill collector is rude and demanding. If you ignore the phone, your children ask why you won’t pick it up. If this is how you’re living right now, don’t despair. Bankruptcy can “stop the bleeding.” As soon as a bankruptcy petition is filed, the court enters what is called an “automatic stay.”
WHAT IS AN AUTOMATIC STAY?
An automatic stay puts all the actions of creditors (people you owe money) on hold while the bankruptcy court determines what type of debt relief is appropriate for you. When the automatic stay is in place,
creditors can’t harass you, and they can’t proceed to sue you for debts listed in your bankruptcy petition. If a creditor already has a judgment against you and is about to garnish your wages, the automatic stay will protect your wages from this as well. Here’s how that works: once your bankruptcy case if file, the Court generates a Notice of “Filing of Bankruptcy Case and of Meeting of Creditors.” The Court EMAILS this notice to your attorney so he or she gets it right away. Armed with this document, your attorney can then file in the court case where the judgment against you was entered a “Notice of Stay of Proceedings.” I typically serve that notice on the judgment creditor, his / her attorney, the court clerk and the Sheriff’s office (since they usually enforce the wage garnishments). That’s the end of all my client’s troubles from that case. Once a bankruptcy petition is filed and the automatic stay is in place, you and your bankruptcy attorney are free to devise a plan to put you back on the path to financial freedom. You no longer have to worry about financial bleeding.