What is an automatic stay under Chapter 13 Bankruptcy?
An automatic stay is a court order that stops most collection activities on any debts that have been incurred before the filing of a Chapter 13 Bankruptcy in Virginia. It stops creditors from taking any action to repossess, garnish wages, or otherwise collect on debts. It also stops foreclosure sales, wage garnishment, and collection calls. An automatic stay can provide much needed relief from growing debt and the relentless efforts of creditors. An automatic stay puts a temporary stop to creditor actions. It does not, however, erase debt or alter any terms of a debt. It just stops creditors from taking any collection action. It is important for debtors to realize that an automatic stay is a temporary solution. If they do not act to discharge or restructure their debts, the creditors can start up their efforts to collect the debts again. The automatic stay is only in effect for the duration of the Chapter 13 Bankruptcy. Once the Bankruptcy is over, the creditors can start collecting again unless the debt is discharged. To take advantage of the automatic stay provided by the Bankruptcy, debtors must make sure that they fully understand their obligations and meet all the requirements for filing for Chapter 13 Bankruptcy in Virginia. If they do not follow the law, the automatic stay may be lifted, leaving them vulnerable to collection efforts.
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