One of the best aspects of a Chapter 13 Bankruptcy is what is referred to as the automatic stay. When you file a Chapter 13 bankruptcy, your creditors are immediately prevented from taking further action against you. This means that they cannot call you, continue to send you bills or take you to court over your debt. If they have a garnishment in place, they must release it. In addition, they cannot repossess your car or foreclose on your house without permission from the bankruptcy court.
Of course, the creditor has to know about the bankruptcy so that they know to stop all collection actions. After your case is filed, the bankruptcy court will send out notices to all creditors listed on your bankruptcy petition. This is why it is so important to list everyone that you owe money to along with all collection agencies. If there is a pending foreclosure or a garnishment, we will notify the creditor immediately after your case is filed to stop the creditor's action. Many times we stop foreclosure sales right before the sale is scheduled to take place.
One downside of the automatic stay is that many creditors feel that they cannot send monthly statements, like a mortgage statement, even if you indicate that you intend to keep the house. This means that you have to make sure that you are sending your monthly payment to the creditor even if you do not get a statement from them.
If you are facing a foreclosure or being garnished, we can make them stop. Contact me or call me today at 757-276-6555 to schedule your free consultation to see how a Chapter 13 Bankruptcy can stop creditors in their tracks and help you keep your house!