Once a debtor has filed for a Bucks County bankruptcy, an automatic stay is issued. This legal status prevents most, but not all, creditors from taking actions to collect a debt. The automatic stay is a very powerful component of a bankruptcy. The biggest benefit to the automatic stay for Bucks County bankruptcy clients is that it prevents creditor harassment. If a creditor attempts to collect a debt after a bankruptcy is filed (which triggers the automatic stay), they are in violation of the Fair Debt Collection Practices Act.
Secured creditors, upon showing cause, may request that they be exempted in a Chapter 7. This normally occurs after an individual is behind on their mortgage and the mortgage company is pursing a foreclosure. If the Bucks County resident wants to try and keep their home, it may be worthwhile to file a Chapter 13 bankruptcy.
An automatic stay will temporarily halt the foreclosure on a home (if in a Chapter 7), but once the debtor’s bankruptcy is discharged, the creditor can proceed with foreclosure. An automatic stay generally lasts until the debtor’s bankruptcy is discharged. It ends if the bankruptcy is dismissed.
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