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Automatic stays help bring debtors peace of mind

On Behalf of | Apr 11, 2020 | Firm News

Dealing with Debt

Individuals who find themselves in a pinch may receive unwelcome debt collection calls. Unfortunately, many people cannot run from them and feel like they have nowhere to turn to. Conversing with debt collectors does not work. Neither does ignoring the phone calls. 

There is a light at the end of the tunnel, however. People with debt can take action into their own hands to find relief. For many, it is the only way; the good news is that starting the process of filing for a Chapter 7 or Chapter 13 bankruptcy may prevent tragic financial consequences in the future. 

Create an automatic stay 

The definition of an automatic stay is “the prevention of pursuing debtors”. It applies to creditors as well as government agencies. The United States bankruptcy code dictates that an automatic stay goes into effect the second an individual completes the steps for filing. It also states that entities such as corporations and large organizations cannot file for this provision to prevent abuse and fraud; representatives of these conglomerates can, of course, find other means to relieve their financial burden instead of going through the steps intended for people such as employees, small business owners and working military veterans. 

An automatic stay gives debtors time to resolve the following financial stressors: 

  • Student loans  
  • Medical bills  
  • Mortgages  
  • Credit card bills and more  

Take advantage of bankruptcy 

There are two common types of bankruptcy. People who are in dire straits can seek out assistance through Chapter 7 bankruptcy, which requires no repayment plan. Instead, filers can have a fresh start without any ill will. Chapter 13 bankruptcy gives individuals the option to pay installments over a period of three to five years. This short time span may allow them to rest easy. 

It is understandable to feel angry and even violated about debt collection calls. Automatic stays may seem like a distant dream for some, but it is a good option for discerning debtors.