In 2012, there were nearly 29,000 bankruptcy petitions filed in the two federal bankruptcy courts located in Washington. When filing for bankruptcy, time is of the essence, and it is to your advantage to file as soon as possible once you have reached the decision.
Regardless of the type of bankruptcy application you file, the act of filing can bring you immediate relief from creditors in the form of an "automatic stay." An automatic stay is a type of injunction that grants you the following types of protections from the moment your bankruptcy petition is filed:
- Halting creditors in their tracks, as they are prevented from contacting you regarding outstanding debts
- Temporarily stopping foreclosure proceedings protecting your wages from garnishment, with certain exceptions for child support, alimony, certain tax proceedings, etc.
- Preventing automobile repossession, unless your lender obtains permission from the court
Stopping creditor harassment
Immediately after you have filed for bankruptcy — whether Chapter 7, 11 or 13 — the federal Bankruptcy Court will send a Notice of Commencement to all the creditors listed in your bankruptcy petition, notifying them that you have filed for bankruptcy and ordering them to cease their collection efforts immediately. Once they receive this notice, creditors may no longer contact you to request payment — either in person or on the telephone — without seeking the bankruptcy court’s specific permission. The court may lift the stay in cases of debts held by secured creditors or non-secured debt that is generally excluded from bankruptcy proceedings, such as child support and alimony.
Although bankruptcy is an effective way to stop creditor harassment, it is important to remember that filing for bankruptcy may affect your credit for several years.
If you feel overwhelmed by collection notices or are being harassed by creditors, a bankruptcy attorney can help you evaluate if bankruptcy is right for you. We at BK Lawyers LLC are available to help you determine if bankruptcy is the appropriate solution for your debt management issues. Contact us to schedule your free initial consultation.