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Understand the automatic stay before relying on it fully

Financial problems affect most people at least once in their lives. In some cases, the issues may be addressed quickly and without lasting repercussions, but in others, Pennsylvania residents may struggle for a long time and accrue a considerable amount of debt. In this latter scenario, collection agencies may try to contact those with debt and collect outstanding balances.

If you have financial problems and the stress of collection calls is becoming too much, you may wonder how you could right your situation. For many people in this predicament, filing for bankruptcy may be the debt relief option needed. One benefit that many people find useful when it comes to filing for bankruptcy is the automatic stay.

Automatic stay

The automatic stay is a feature of bankruptcy that causes creditors and collection agencies to stop their actions for a certain period of time. As soon as you file a bankruptcy petition, the automatic stay goes into effect, and it typically does not need a court order to do so. However, the automatic stay is not necessarily guaranteed as exceptions do exist.

Exceptions and stipulations

When it comes to the exceptions and stipulations of an automatic stay, you may find understanding the following factors useful:

  • The court could lift the automatic stay if a good reason exists, which means creditors could again carry out actions against you.
  • The stay only lasts for a particular period of time, and after that time period ends, creditors can restart their collection efforts.
  • The court may delay the stay or decide that it should not go into effect at all.
  • The automatic stay does not stop all creditor actions.
  • If you file for bankruptcy twice in one year, the stay will only have a 30-day duration in the second case unless you request an extension.
  • If you file for bankruptcy three times in one year, the court will not grant you an automatic stay in the third case. However, you do have the option of filing a motion and trying to convince the court to grant you the stay.

While the automatic stay does have its benefits, understanding how it works is vital before relying on it fully. Fortunately, you can discuss the stay and other aspects of bankruptcy with an experienced attorney and gain reliable information on what benefits you could reap from moving forward with this debt relief option.

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