Anyone with debt knows the feeling you get when a creditor calls or a collection letter comes in the mail. The twisting knot in your stomach, the prickling fear on your neck, the resulting feeling of hopelessness as they recite the same old demands and threats; it’s a painful experience, but it can be stopped.
When debt seems insurmountable, the answer may be Chapter 7 bankruptcy. This process will eliminate virtually all your credit card bills, medical bills and other unsecured debt. Possibly more importantly though, once you file, creditors – by law – will no longer be able to contact you.
Ugly tactics used by creditors
Debt collectors have a wide arsenal of tools they use to coerce, intimidate or frighten debtors. It is horribly demoralizing to be bombarded with communications when you simply cannot make the payments they are asking for. That is where an “automatic stay” comes into play.
Receiving an automatic stay is one of the first boons a person receives when filing for Chapter 7 bankruptcy. It ceases the familiar communications from creditors. Imagine living a day, a week or even a month without creditors:
- Threatening to seize property or make an arrest
- Lie to you about which company they are representing
- Depositing post-dated checks
- Posing as an attorney or other persona to intimidate you
- Informing your employer of your debt
- Constantly calling your home or work
These are just a few of the ways creditors will no longer be able to harass you once an automatic stay is in place. Plus, should a creditor violate the automatic stay, depending on the nature of the violation, you may be entitled to collect damages from the creditors.
The road to receiving an automatic stay
There is a bit of a preamble before your phone goes silent and your mailbox remains clean. Step one before a person may file for Chapter 7 bankruptcy is to get credit counseling. You will need a certificate proving that you have received counseling within the last 180 days when you file. Counseling will help determine if you truly need to file bankruptcy or if a payment plan is better for your needs.
Step number two is to formally petition or bankruptcy. You will need to fill out several forms with information on your income, expenses, property and so on. This is where things can become complicated and the representation of an attorney can save major problems down the road.
Step number three is to finally take a breath, because once your documents have been filed, your automatic stay will go into effect. This means better sleep at night and less stress during the day.
Filing for Chapter 7 bankruptcy may sound extreme at first, but it is a vital tool that helps thousands of people get out of debt each year. You don’t have to live with constant phone calls and harassing letters – this way out can help you get back on track and live your best life again.