Can filing for bankruptcy stop my creditors’ collection efforts?

by | Dec 3, 2021 | Bankruptcy

Having creditors chasing you for your debts can be exhausting. They won’t go away unless you pay them back, but what if you can’t afford that? If you are going through this situation, you must know that there is a way in which you can stop them on their tracks without having to lose everything you have. By filing for personal bankruptcy, not only can you get rid of your debts, but you can also make your creditors stop pursuing you.

The automatic stay

The court will put you on a temporary automatic stay if you file for bankruptcy. The automatic stay is a federal order that stops collection efforts from creditors, collection agencies or government entities. This relief would also prohibit creditors from filing lawsuits against you for your debts. Some other things that the automatic stay can do for you are:

  • Stop your utilities from being disconnected
  • Stop a foreclosure proceeding
  • Stop an eviction
  • Stop wage garnishments

The protection of the automatic stay lasts until the bankruptcy process is over. However, creditors can file a motion to remove the automatic stay before the bankruptcy case closes. They can only do this if the stay would make them lose a significant amount of money.

Your right as a debtor

Although creditors can lift the automatic stay in some instances, this is usually not the case. If you decide to file for bankruptcy, your creditors will stop bothering you, and you will have more breathing room to manage your debt. This is your right as a debtor, and you can sue a creditor if they don’t respect it.