What is an automatic stay under Chapter 13 Bankruptcy?

An automatic stay is a legal term used in Chapter 13 Bankruptcy Law in West Virginia. This court order typically prevents creditors from trying to collect on a debt and also halts any other legal actions against the debtor. This stay helps to preserve the debtor’s assets and protects them from creditors. Once a debtor files for bankruptcy, the automatic stay immediately stops most actions of creditors, including phone calls, letters, lawsuits, garnishments, and repossessions of assets. This helps to preserve the debtor’s assets, so they can be used as part of the repayment plan during the bankruptcy process. An automatic stay can also stop eviction proceedings and foreclosure on a house if the debtor has fallen behind on their mortgage payments. In addition, the automatic stay may also be extended to a debtor’s cosigner, meaning the cosigner is also protected from creditors. Although the stay is automatic, the debtor must still seek court approval to extend the stay if they wish to take action against the creditors themselves. The stay is put in place to protect the debtor while the other parts of the Chapter 13 Bankruptcy process are settled. This gives the debtor a chance to repay creditors according to the repayment plan and allows them to move past their financial struggles.

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What is an automatic stay under Chapter 13 Bankruptcy?

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