Automatic Stay

Automatic stay is a significant benefit for homeowners in a chapter 7 bankruptcy. The automatic stay provision protects consumers against creditors from debt collector's debts from because they are not allowed to call or send you additional collection letters. The creditors are prevented from continuing any legal action against you, or repossess your car or other assets. And even if a garnishment order has been issued, the automatic stay stops garnishment of your wages.

Foreclosure: If your home is a foreclosure proceeding, the automatic stay will stop the foreclosure action. In some cases, the chapter 13 bankruptcy is the best option for halting a foreclosure; chapter 7 bankruptcies can also temporarily stop foreclosure procedures most of the time.

Repossession: If you have an automatic stay, creditors or repo companies are not allowed to repose your car. In order to keep your automobile on a permanent "automatic stay" basis, you will have to reaffirm the financing with your car dealer or return the car during your bankruptcy filing.