Creditors often use frequent communication via calls, email, mail, texts or direct messaging to try to collect debts. If you know that you don’t have the money to pay them while being able to pay for life’s necessities, you may feel stress each time you’re contacted by them.
There may come a time when you realize that you need to do something to take control of your finances. One option you have for this is to file bankruptcy. Taking this step can put an end to the creditor contact, which may allow you time to plan out your financial future so you can make decisions that you feel are in your best interests.
Bankruptcy comes with an automatic stay
Once you file for bankruptcy, the court issues an automatic stay. This is a court order for creditors to cease collection attempts, which puts all creditors on the same playing field when it comes to getting payment for the accounts.
There’s a very small chance that creditors will receive the full payment for the balance due. Instead, they’ll receive partial payments, if any at all, and the rest will be discharged as part of the bankruptcy. Because of this, it’s critical that no creditors try to circumvent the bankruptcy process to collect extra money.
The relief of the automatic stay is only one of the benefits of bankruptcy, so it’s critical that you consider the comprehensive effect that filing will have on you now and in the future. Working with someone familiar with these matters may be beneficial, so you can learn about your responsibilities and rights throughout the process.
