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What is an Automatic Stay?

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What is an Automatic Stay?

When you file for Chapter 7 or Chapter 13 bankruptcy, an automatic stay goes into effect. An automatic stay is a court order that prevents creditors from starting or continuing any debt collection activities, such as a debt collection lawsuit. It also protects against foreclosures, repossessions, and wage garnishments. An automatic stay provides immediate relief and will typically remain in place for the duration of your bankruptcy case.

What is an Automatic Stay: Benefits of Chapter 7 Bankruptcy

Chapter 7 bankruptcy is designed to give someone a fresh start by eliminating their unsecured debts. Unsecured debts include credit card bills, medical bills, amounts due on vehicles that were surrendered or repossessed, rent from a prior residence, and personal loans. (Debts that generally cannot be eliminated under Chapter 7 include child support, alimony, student loans, and certain nondischargeable tax debt). A Chapter 7 will stop the garnishments of someone’s wages or bank accounts and will prevent creditors from taking actions such as evictions, foreclosures, repossessions, or civil litigation.

What is an Automatic Stay: Benefits of Chapter 13 Bankruptcy

 A Chapter 13 bankruptcy involves the repayment of debts in a structured, court-supervised manner. With Chapter 13, a repayment plan is established, detailing how much you will repay per month during a specified time period (typically three to five years). Individuals who file for Chapter 13 are often looking for relief from the stress of constant collection efforts. This type of bankruptcy can halt foreclosure proceedings, prevent repossessions, stop creditor harassment, and allow you time to rebuild your credit.

Have Additional Questions? Contact Burrow & Associates’ Bankruptcy Team

Filing for bankruptcy is always a serious decision, and you should consult with an experienced attorney to determine the best option for you. Burrow & Associates accepts all regional filings and has convenient bankruptcy office locations in Athens, Conyers, Duluth, Gainesville, Kennesaw, and Morrow. You can contact us at (678) 323-2394 or via our website to set up a free consultation. We’re currently running a promotion and will file your bankruptcy case for NO MONEY DOWN.

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