Automatic Stay in Michigan Halts Creditor Harassment
The automatic stay is your legal protection given by the Bankruptcy court to stop a foreclosure sale, creditors collection efforts, creditor’s harassing phone calls, creditors lawsuits and wage garnishments, and even utility disconnections. But many in Michigan who fear home foreclosure, car repossession, or constant collections are unsure of their rights. This guide is the answer. It states why the automatic stay is allowed, what it can prevent, what it cannot prevent, and how best to use it.
Why is an Automatic Stay allowed?
The automatic stay is allowed in order to provide a debtor relief from ongoing collection efforts, harassment by creditors and/or collection agencies, and will even halt foreclosure activities. The automatic stay provides some breathing room for the individual filing for Bankruptcy, so that the debtor can either reorganize their business, attempt to create a repayment plan, or even be legally relieved of the financial pressures that have driven the small business or individual into filing a Michigan Bankruptcy.
What can the Automatic Stay Protect in Michigan Bankruptcy?
Perhaps most importantly, the automatic stay can protect you from a foreclosure sale. If you are filing Michigan Chapter 7 Bankruptcy, you can buy yourself time to get a new residence, or under the protection of a Chapter 13 Bankruptcy Plan, you may be able to catch up on your mortgage payments.
You can also stop utility disconnections for a minimum of 20 days. If you are in over your head with bills, keeping your power on can make it possible to stay in your home.
Another big point to consider is the income you have coming in, whether through public benefits or employment. If you are receiving money from the government for social security, this can be protected. If you have a job and creditors are trying to get a wage garnishment, this too can be stopped.
What can’t the Automatic Stay do in Michigan Bankruptcy?
The automatic stay does not protect you from everything. You still have to pay your taxes, and if you don’t you can be audited. The IRS cannot take any property or income you have, however, as this is protected. Filing Bankruptcy also does not protect you from having to pay child support or alimony; these still need to be paid. If you have criminal proceedings pending against you, these are considered separate from your debt rights; you still have to face criminal charges.
Best Use of Automatic Stay
While the automatic stay cannot stop all legal actions against you, it does help in some key ways. Bankruptcy does not solve all your problems. However, in cases of debt, at a minimum it protects you from collections and continuing wage garnishments. It can give you the breathing space you need to protect your assets, property, and income as provided under the U.S. Bankruptcy Code.