Bankruptcy, as you may know, is the legal process that allows individuals, couples, or businesses to liquidate many of their debts and get a fresh financial start. There are several ways to declare bankruptcy; in the Chicago area, you should seek legal advice and help regarding bankruptcy from an experienced Chicago bankruptcy lawyer. All bankruptcies nevertheless have one element in common: the automatic stay. When you file for bankruptcy, an order for relief – called an automatic stay – goes into effect. The automatic stay will prevent creditors from harassing you about debts related to: foreclosure, credit cards, repossession, payday loans, medical bills, IRS debt, and more.
The legal purpose of the automatic stay is to ensure that multiple creditors get treated fairly and equitably in a bankruptcy. The automatic stay lets no creditor get an advantage over other creditors and makes sure there’s something for everybody, even if it’s only pennies on the dollar. When you’ve filed for bankruptcy, the automatic stay forbids creditors to use any of these tactics:
- – Demanding a payment verbally or in writing
- – Filing or pursuing a lawsuit against you
- – Garnishing your wages or issuing a citation against you
- – Foreclosure or repossession
In most cases, it’s a civil offense for a creditor to violate an automatic stay. However, an automatic stay does not protect you from certain financial responsibilities, notably child care, alimony, and any fines or other payments owed to the courts for any reason. In the Chicago area, all creditors identified in your bankruptcy petition receive notice of your bankruptcy filing and the automatic stay from the court.
The automatic stay is an important part of the protection you gain when you file for bankruptcy. A good Chicago bankruptcy lawyer can explain the various bankruptcy options to you and suggest the move that’s in your best longterm interests. If you’re facing mounting debt or the threat of foreclosure anywhere in the greater Chicago area, get the help you need and consult an experienced Chicago bankruptcy lawyer immediately.