How does the automatic stay protected me from creditors during a Chapter 11 bankruptcy?

When filing for Chapter 11 Bankruptcy in North Carolina, an “automatic stay” is put into effect. This stay is an automatic protection by the Bankruptcy Court that prevents creditors from taking any action to collect unpaid debts from you. It helps to ensure that creditors will not take any measures to seize your assets or garnish your wages during the bankruptcy process. The stay will halt any legal action against you and your assets, such as foreclosure proceedings or lawsuits, as well as any other attempts to damage your credit or harass you. It also stops creditors from calling you and sending you collection notices. It also applies to future debts you may incur while the stay is in effect, as long as you are able to prove that the debt was incurred in good faith and not primarily for the purpose of obtaining money or property. The stay will remain in effect until you receive a discharge from the bankruptcy court. The discharge marks the end of the bankruptcy proceedings and permanently prohibits creditors from attempting to collect on the discharged debts. Even after the stay is lifted, creditors are still unable to contact you or take any action against you without the court’s permission. The stay protects you during the entire length of the Chapter 11 bankruptcy process.

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How does the automatic stay protected me from creditors during a Chapter 11 bankruptcy?

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