If you have decided to file for bankruptcy, most likely you’ve been under financial duress for months now, or maybe even years. Medical debt is usually the number one reason given for filing bankruptcy, whether in Chapter 7 or Chapter 13. Unemployment comes in as a close second. You may also have suffered through a difficult and financially draining divorce, or perhaps you are struggling due to a hefty student loan payment that is due each month. Whether one or more of these unexpected events hit you hard, they are probably accompanied by escalating credit-card debt as well.
The Automatic Stay Halts All Collection Activity
If you are thinking about filing for bankruptcy, then you are probably not only unable to make monthly payments to creditors, but are experiencing all sorts of harassment from debt collectors. You may be seeing one strange number after another calling your phone, not to mention the letters and threats that arriving in your mail on a constant basis. When you file for bankruptcy, all this collection activity should stop immediately due to the automatic stay-and if it does not, you should have grounds to file charges against creditors violating the stay.
This Includes Home Foreclosure, Car Repossession & Student Loans
Your mortgage lender may have started foreclosure proceedings or even already be preparing to sell your house at auction. The company you purchased your car from may be threatening repossession of the car you use to drive back and forth to work each day. You may be behind on student loan payments, with the threat of lawsuit pending. The automatic stay halts those processes too. The length of this stay depends on whether secured creditors such as mortgage or car lenders file a motion to have the stay lifted-and whether it is granted. Although it often is, hopefully the period that the stay is in effect will give you enough breathing room to come up with the funds needed or an alternative plan. And although it may be a tall order financially, in Chapter 13 you should be given the opportunity to make up for the delinquencies on your mortgage and stave off foreclosure permanently as you keep up with your mortgage.
Most Unsecured Creditors Must Abide by the Stay Throughout Bankruptcy
For unsecured creditors, the automatic stay is in effect for the duration of the bankruptcy. In Chapter 7, your debts will be discharged within three to six months, and this should be reflected on your credit report. In Chapter 13, your debts will be rolled into a repayment plan and discharged within three to five years. Keep in mind however that once your bankruptcy has been completed, you must keep paying on debts such as your student loans, family support, taxes, and more.
Contact Us for Help
Because Levitt & Slafkes, P.C. has already helped thousands of clients through the bankruptcy process, we understand exactly what you are going through. Our experienced bankruptcy attorneys can offer solutions tailored specifically to your financial circumstances. The initial consultation is free, and we are even available to meet with you on weekends and evenings.
Contact us today so one of our caring attorneys can evaluate your case and discuss the best options available to you. We are here to help! Call us at 973-323-2953, or contact us online to schedule a free consultation