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When you file a Chapter 7 or Chapter 13 bankruptcy, the automatic stay is immediately effective. The stay prohibits creditors from continuing any collection activity during the bankruptcy case. Thus, because the stay is effective as soon as your petition is filed, the timing of your filing can be crucial, especially in emergency situations such as:

·         Foreclosure. While foreclosure actions are not permanently stopped by a bankruptcy filing, they are temporarily halted for a period of time.  The mortgage lender must obtain bankruptcy court approval to continue the foreclosure. While the foreclosure action is halted, you can hopefully use the extra time to negotiate with your mortgage lender or at least remain in your home for a few additional months.

·         Wage or bank garnishments. Garnishments are stopped by a bankruptcy filing.  As a result, your creditor cannot continue taking money out of your paycheck or bank account.  An additional benefit is that you may be allowed to discharge the debt linked to the garnishment.

·         Eviction. The eviction of a debtor may be delayed by a bankruptcy filing, depending on whether the landlord already has a judgment for possession.

·         Utility disconnections. If you are facing your electricity, gas, water or other utility being disconnected, a bankruptcy can postpone the disconnection for at least 20 days. 

If you are facing one of the above situations or some other emergency financial situation, contact Levitt & Slafkes, P.C. to discuss filing a bankruptcy case.

If you are interested in learning how filing a bankruptcy case can benefit you, contact Levitt & Slafkes, P.C., at 973-323-2953. You can also reach us by filling out our online form. We represent debtors in Chapter 7, Chapter 13 and Chapter 11 filings. Let us help you get the fresh financial start you need today.