People who owe more than they can pay quickly learn that debt collectors push the boundaries of the collections tactics allowed by the law, or often ignore the law entirely. Dealing with collections calls is only one of many stressful things that unmanageable debt brings, and many people feel completely overwhelmed by these pressures. If you have screened calls from your credit card provider, car dealer and mortgage company all in one day, you understand the feeling.
Fortunately, the law provides protection for debtors who need a fresh start. Filing for bankruptcy includes an automatic stay, which places an immediate halt to collections actions from lenders and other parties attempting to collect from you. This is an important tool when you need to protect your home and the few resources you have while you get back on track financially.
Stopping collection tactics
Once you file for bankruptcy, most debt collection tactics must cease altogether. There are still some ways for debt collectors to contact you, depending on the specifics of the debt, but most people who use bankruptcy enjoy a complete halt to collections for the debts they aim to discharge.
If collectors continue to contact you, they may face serious repercussions. While you work through the bankruptcy process, you should enjoy a peaceful break from relentless pressure to pay down debt, and the automatic stay makes this possible.
Protecting necessities for living
An automatic stay does more than simply stop collectors from harassing you repeatedly through phone calls. It also freezes collections from utilities providers to keep your lights on and water running.
Similarly, an automatic stay halts foreclosure proceedings and evictions in many cases. These protections allow you to breathe easily and may keep the heater running under your own roof during the winter months, making it easier for you to focus on solutions to your debt concerns instead of worrying about where you will sleep or how your family will stay warm.
In some instances, the automatic stay also puts an end to wage garnishment, which can help you refocus your resources and attack your remaining debts directly.
Bankruptcy is not a simple, painless process, but it is often much easier and more beneficial than any of the other options. If you find yourself struggling to overcome your debt, bankruptcy offers a proven path to a fresh start, and with a strong plan, you can keep your priorities and rights protected while you work toward a new financial start.