Constant collection attempts from debt collectors can be stressful for people who aren’t able to pay those bills. These attempts can come through the mail, phone calls, text messages or social media messages. Once they start, it’s often difficult to get them to stop.
When a person recognizes that they can’t pay their debts while maintaining life’s necessities, they might opt to file for bankruptcy. This gives them a chance to take control over their finances, but it can also mean that they no longer have to worry about debt collectors harassing them for money.
Bankruptcy triggers an automatic stay
One thing that happens when a person files for bankruptcy is that the court issues an automatic stay. This order forbids creditors that are included in the bankruptcy from contacting the filer in an effort to collect debts. This can give the filer peace of mind in knowing that they won’t be harassed.
There’s another reason why the automatic stay is important—it stops creditors from trying to circumvent the established payment order that’s present in bankruptcy filings. Many creditors will only receive partial payment during a bankruptcy, so it’s not fair if any of them receive money from the filer on top of the money from the court.
The automatic stay shouldn’t be the only reason a person files for bankruptcy. Anyone considering this option should learn about the benefits and drawbacks, which may be easier if they work with someone who’s familiar with these proceedings.