One of the most powerful tools a debtor obtains by filing for bankruptcy protection is the automatic stay. The stay goes into effect as soon as you file your bankruptcy petition and it prohibits creditors from taking any further collection actions against you while your case is pending. Thus, the stay can be very helpful when you are facing a financial emergency such as:
- Foreclosure. If your home is going through foreclosure, filing a Chapter 7 or Chapter 13 can temporarily halt it. Depending on your financial situation, you can use this time to negotiate with your mortgage lender or it at least allows you to remain in your home for a few additional months. In a Chapter 13 filing, you can catch-up your delinquent mortgage payments through your repayment plan.
- Eviction. If you rent your home and your landlord is threatening to evict you, filing a bankruptcy can help. However, it is important to understand that you must file your bankruptcy case before your landlord obtains a judgment for possession.
- Garnishment. If a creditor has obtained a monetary judgment against you and commenced a garnishment action to remove funds from your bank account and/or wages, filing a bankruptcy will stop the garnishment. You may also be able to discharge or eliminate the debt associated with the garnishment in your bankruptcy filing. In certain cases, the debtor may even be able to recover a portion of the garnished funds.
- Utilities. If your utilities have been disconnected, a bankruptcy filing may allow you to get them reinstated. This can be crucial if it is below freezing outside and you do not have electricity or gas.
If your financial struggles have gotten to the point where one of the above situations is imminent, contact our office for the help you need.
The personal bankruptcy process can be simple and effortless if you retain an attorney who will explain the steps to you. Ms. Anderson is dedicated to walking you through each step, explaining the process along the way. At The Law Office of Diane Anderson, we are determined to help our clients obtain the best results possible.