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What Is All This Hubbub About The Automatic Stay In Bankruptcy?

January 15, 2012 | Comments: 0 | Views: 173

It's no secret that Americans are having trouble making ends meet ever since the economic downturn back in 2008. Over the last couple of years, banks have started lending to ever so stretched thin Americans just to push the money out that they are receiving from bailouts QE1, QE2 and now "the twist". The bottom line is, at some point in time this will have to end, because debtors are already having trouble making the minimum payments on their credit card debts. Pumping money into the credit card industry is only going to end up bad and is probably the next bubble to burst. Creditors don't have a problem lending people more money than they can afford, but sure get nasty when the debtor tells them they don't have enough money to pay them. This story is repeating itself all the way across the nation and will only continue to get worse. Many of these individuals at this point don't even realize that filing for bankruptcy could end their misery by taking a simple trip to a bankruptcy attorney.

Because of today's economic faux pas, creditors need to share in the responsibility of what they have allowed to go on, all just to make a few more bucks. Many people believe that they are the source of the problem and not helping with the solution. Just talk to any bankruptcy attorney and they will explain the creditors are not your friends, they are nice to you when you're sending them money, but all bets are off when an individual hits the wall and can no longer afford to pay. It's not like they can't say they didn't see it coming. They know that there is a possibility of mass amounts of people filing bankruptcy, but they continue to push it out there and just roll the dice one more time. Anyone who's been to Vegas knows how that ends up.

When all things go bad and the love affair is over with the creditor, there is always a bankruptcy attorney that will hear the individual's story and help them out. Where filing bankruptcy really gets its power is from the automatic stay. In a nutshell, the automatic stay stops creditors from collecting on all of the debtor's debts that are listed in the bankruptcy filing. On a side note, that's why it's extra important to make sure that an individual includes all of their creditors when submitting the paperwork to the bankruptcy attorney. The automatic stay is the most powerful tool that a bankruptcy attorney can use to slap around the creditors and put them in their place. Once the stay is in place, all collection and legal activity against the debtor must stop, including foreclosure, lawsuits, judgments and wage garnishments. This covers just about the entire spectrum of debt. The only thing it won't stop is court ordered activity like child support, maintenance payments and court-ordered restitution. Those must be paid on continuously even though the individual is filing for bankruptcy. Creditors don't want debtors to know too much about bankruptcy because of the automatic stay. They realize that once the individual files for bankruptcy all bets are off and in most cases they will receive nothing.

The author is a professional that formed FilingBankruptcyNow.Com which provides information for debtors considering filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy and helps individuals stop foreclosure and eliminate their debt by putting them in touch with a local bankruptcy attorney.

Source: EzineArticles
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