Filing for bankruptcy comes with various benefits for those drowning in debt. One of those benefits is the automatic stay. The automatic stay provides bankruptcy filers with additional peace of mind if they are dealing with foreclosure, creditor lawsuits, and more. Our Irvine bankruptcy attorneys explain the benefits of the automatic stay below.
What Is Automatic Stay?
The automatic stay goes into effect immediately after you file for bankruptcy. The stay puts a hold on most creditor actions, such as creditor harassment and collection activities committed against you. Creditors can no longer attempt to collect debt, repossess assets, garnish wages, or even try to sue you. You can finally get a breather from creditors with the automatic stay.
An automatic stay stops collection activities and can therefore help you:
- Stop foreclosures
- Stop repossessions of property or assets
- Puts an end to collection activities and lawsuits
Automatic Stay & Foreclosure
The automatic stay can be very beneficial for those dealing with foreclosure because it provides additional time to try to deal with a pending foreclosure. If you file for Chapter 7 bankruptcy, you will likely only have a small window of time to deal with foreclosure since mortgage debt can be eliminated through bankruptcy. However, if you file for Chapter 13 bankruptcy, the automatic stay can give you time to catch up on any mortgage arrears and stay in the home. You'll repay debts over a three to five year period, making your payments manageable so that you have leftover to make mortgage payments.
Irvine Bankruptcy Attorney
If you think you will benefit from the bankruptcy automatic stay but need guidance, contact McFarlin LLP today. Our team of bankruptcy attorneys provides reliable, high-quality, legal services to clients. We have helped clients discharge over $750 million in debt and we have a 99 percent success rate in debt discharge.
Get in touch with us today at (949) 570-5025 to schedule a consultation!