What Is an Automatic Stay in Bankruptcy?
Once you’ve made the decision to file for bankruptcy, there will likely be many points that simply don’t make any sense to you unless you’ve either spent years studying Indiana bankruptcy law or you’ve declared bankruptcy in the past.
One of these items might be an automatic stay. Most debtors will be issued an automatic stay once the judge has accepted their bankruptcy petition. An automatic stay is an essential element of the bankruptcy process, and below, we review how an automatic stay will impact you and your co-signers.
How an Automatic Stay Will Affect You
No matter which type of bankruptcy you are pursuing, whether that be a Chapter 11, Chapter 7, or Chapter 13 bankruptcy, once the judge has granted your bankruptcy petition, they will order an automatic stay on your debts. This means that your creditors will no longer be able to attempt to collect on the debt you owe.
In any of the aforementioned types of bankruptcy, you’ll have already taken steps to begin repaying your debt, and it is therefore counterproductive to allow your creditors to keep calling and insisting that you set up a payment plan.
Once you’ve met your obligations as outlined in your bankruptcy declaration, your remaining debts will be discharged and you’ll finally have the clean financial state you need to move forward with your life.
What About Your Co-Signers?
We are frequently asked how an automatic stay will impact your co-signers, or those who are partially responsible for a particular debt when they signed their name on your loan application.
Fortunately, an automatic stay puts a stop on any attempts to collect a debt, which means that your co-signer should also stop receiving phone calls and letters from creditors. In the event that a creditor continues to seek compensation from your co-signer, you can reach out to your lawyer who will formally address the creditor in question.
Consult an Indiana Bankruptcy Lawyer
When you’re ready to move forward with your life debt-free, you can reach out to an Indiana bankruptcy lawyer at Rowdy G. Williams Law Firm for assistance. Simply complete the quick contact form below or call our office at 1-812-232-7400 to schedule your complimentary case evaluation today.