What is the Automatic Stay?

The Automatic Stay is an important part of Chapter 7 Bankruptcy Law in California. It is a legal protection that stops creditors and collectors from trying to collect debts from the person who has filed for bankruptcy. This protection applies to all debts, both secured and unsecured. When a person files for bankruptcy, an Automatic Stay is issued by the court. This creates an immediate legal barrier, preventing creditors from calling, sending letters, filing lawsuits, or taking any other action to try to collect what is owed. It is important to note that the Automatic Stay does not mean that all debts are forgiven; it simply prevents creditors and collectors from attempting to collect what is owed while the bankruptcy is being settled. The Automatic Stay is an important part of Chapter 7 Bankruptcy Law in California as it helps to protect a person’s assets during the bankruptcy process. Without the protection of the Automatic Stay, a person could be overwhelmed with calls, letters, and lawsuits from creditors and collectors who are trying to get the money they are owed. With the Automatic Stay in place, a person can focus on addressing their debt while still having the peace of mind that they are protected from creditors.

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