Understanding Bankruptcy Benefits And Protections

Whether you file Chapter 7 or Chapter 13, you will very quickly observe the benefits and protections of bankruptcy. Starting the bankruptcy process triggers what is known as an automatic stay.

This tool temporarily stops creditor communications, collection actions and other matters that could disrupt your financial security. Benefits of an automatic stay include:

  • Stopping creditor harassment
  • Stopping foreclosure proceedings
  • Preventing service providers from cutting off your utilities.
  • Stopping eviction proceedings
  • Halting wage garnishment
  • Suspending payments on a criminal judgment (such as court-ordered restitution)

These protections (via the automatic stay) will go into effect almost immediately. Creditors are prevented from calling you. But if they call you before learning of the automatic stay, you can instruct them to speak to your lawyer.

Are There Limitations To An Automatic Stay?

While the automatic stay is a powerful tool, it is both temporary and limited in scope. Here are some of those limitations:

  • It will not stop child support obligations.
  • You may still have to meet certain tax obligations.
  • If you have been convicted of a crime, it will not prevent you from serving the non-financial portion of the criminal sentence (jail time or community service, for example).
  • It will not stop wage garnishment for purposes of repayment in cases where you have taken a loan against your pension.
  • Creditors can individually ask a court to lift the injunction preventing collection actions on their part. The court may lift the injunction on a case-by-case basis.

How We Can Help

At Feeman Law Offices, we are ready to help you pursue the bankruptcy option that is right for you, and we will fight to protect your rights and your peace of mind. Unfortunately, some creditors may try to ignore the injunction and continue to harass you. In such cases, report the violations to attorney Scot Feeman. If the creditor willfully violated the automatic stay, we can pursue damages and attorney's fees from the creditor.

Is Bankruptcy The Right Option For You? Call Us To Find Out.

Feeman Law Offices offers free initial consultations to prospective clients in Lebanon and throughout Central Pennsylvania. To schedule an appointment, call us at 717-450-7114 or fill out our online contact form.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.