People who are drowning in debt may need to find a way to get control over their finances. This can become very stressful, particularly when they know that they don’t have enough money to handle debts and the necessities of life.
One of the most stressful things about having debts is being contacted by creditors. Getting mail, text messages or phone calls from creditors can immediately cause the person to tense up.
How can bankruptcy help stop creditor contact?
When a person files for bankruptcy, the court issues an automatic stay. That order prevents creditors from being able to continue collection efforts on the debts while the bankruptcy is open. This can allow the filer to have peace of mind and the ability to make financial decisions without pressure from the creditors.
The automatic stay is important because it puts all creditors in their proper position for collection by taking away their ability to circumvent the bankruptcy process. Debts aren’t likely to be fully paid during a bankruptcy, so the automatic stay ensures that each creditor only receives the payment they’re due.
Filing for bankruptcy is a difficult decision for many people, but it’s one that can help them to have a fresh financial start. The automatic stay shouldn’t be the primary consideration for filing, so it’s best for anyone in this position to learn about the options they have and how filing may affect them. Working with someone who knows about the individual’s circumstances and bankruptcy may be beneficial.