The automatic stay is your legal protection given by bankruptcy court to stop a foreclosure, collections, utility disconnections, and can often buy time to pay off assets you want to keep. But many in Dallas fearing home foreclosure, car repossession, or constant collections are unsure of the main rights they have. This blog guide is the answer. It states why the automatic stay is allowed, what it can prevent, what it cannot prevent, and how best to use it.
Why is it allowed?
The automatic stay is allowed for economic downturns we have in our country. Just as the stock market adapts to market changes in safer ways than a century ago, consumer debt protection is designed to help those who are in danger of losing everything. In other words, it’s a benefit of how our economy has evolved to better help consumers. If there were no automatic stay then foreclosures, repossessions, credit card debt, and other debts would ruin thousands of lives every year.
What can the automatic stay protect in Dallas Bankruptcy?
Perhaps most importantly, the automatic stay can protect you from foreclosure. If you are filing Dallas Chapter 7 bankruptcy, you can buy yourself time to get a new residence. However, by filing Chapter 7, you are in danger of losing the home. Chapter 13 bankruptcy may be better for Dallas residents, as you have the chance to save your home from foreclosure.
You can also stop utility disconnections for a minimum of 20 days. If you are in over your head with bills, keeping your power on can make it possible to stay in your home.
Another big point to consider is the income you have coming in, whether via public benefits or via work. If you are receiving money from the government for social security, this can be protected. If you have a job and creditors are trying to get a wage garnishment, this too can be stopped.
What can’t the automatic stay do in Dallas bankruptcy?
The automatic stay does not protect you from everything. You still have to pay your taxes, and if you don’t you can be audited. The IRS cannot take any property or income you have, however, as this is protected. Filing bankruptcy also does not protect you from having to pay child support or alimony; these still need to be paid. If you have criminal proceedings coming against you, these are considered separate from your debt rights; you still have to face criminal charges.
Best Use of Automatic Stay
While the automatic stay cannot stop all legal actions against you, it does help in some key ways. Bankruptcy does not solve all your problems, but in cases of debt, at a minimum it protects you from collections, and gives you the opportunity to protect your property, assets, and income. The biggest advantage of using the automatic stay is with Chapter 13 bankruptcy: it not only delays a foreclosure of your home, but can stop it if you file bankruptcy prior to foreclosure documents being submitted.
