J. Dinkins G. Grange is an attorney in Northeast Florida, helping his clients find solutions to their financial problems, which in some cases includes bankruptcy in some cases. This Blog contains general bankruptcy relevant information. His practice includes representing clients in various areas of civil litigation including Fair Debt Collection Practices Act, Chapter 7 and Chapter 13 bankruptcies, foreclosure defense and probate.
Thursday, August 25, 2011
Advantages and Disadvatages of Filing Bankruptcy - Advantages: Part 4
This is part 4 of a 5 part series on the advantages of filling bankruptcy. This 5 part series will be followed by a multi part series on the disadvantages of filing bankruptcy.
Stay Relief. When you file your bankruptcy petition, there is something called an automatic stay that is put in place. This is often referred to as stay relief, or simply a stay. The stay prohibits collection efforts from commencing or continuing, and tends to be liberally construed by some Courts. It stops garnishment of wages and financial account, phone calls and letters from anyone attempting to collect, foreclosures, evictions (if an eviction order has not already been issued by the court), repossessions, and the shutting off or disconnecting of utilities. Some collection efforts will be temporarily suspended, while others will cease permanently. In fact, you may stop receiving bills for payments on things you intend to keep paying, like a mortgage payment on a house you intend to keep. You may still receive a notice from time to time as to the balance of an account, or general actions concerning accounts within an institution, and usually these notices will have a clear disclosure printed within the materials stating it is for informational purposes only.
Creditors or collection agencies who violate the automatic stay may be subject to being found in contempt to court, which could lead to damages and other penalties the violating party would have to pay. For people experiencing stress from the continuous collection efforts of debt collectors and creditors, the stay provides much needed relief.