People who are in debt may try to avoid checking the mail or answering the phone because they worry that there will be someone demanding money from them. This is more difficult for a person who wishes they could pay the debt but simply doesn’t have the money to do so.
For many, the need to regain control of their finances is a priority. They may choose to explore the possibility of filing for bankruptcy. Doing this can put an end to the demands for payment and reduce stress greatly.
How does bankruptcy stop collection efforts?
When you file for bankruptcy, the court will issue an automatic stay. This order prohibits creditors from trying to collect from you. This isn’t done to make your life easier, but it does.
The automatic stay is meant to ensure that no creditor takes wrongful precedence over another. Instead, they all have to go through the court to get the payment they can on the debt. In most cases, creditors will only receive little or nothing through the bankruptcy.
Anyone who’s being harassed by creditor phone calls or debt collection attempts should consider the option of filing for bankruptcy. While the automatic stay shouldn’t be the driving point for bankruptcy, it’s a benefit that you can enjoy once you file. Working closely with attorney familiar with the consumer bankruptcy laws in this country is beneficial.