Using The Law To Make Your Life Better

The "automatic stay" in a Chapter 7 bankruptcy filing

David Sexton

A number of previous posts have discussed the pros and cons of Chapter 7 bankruptcy. Each situation is different, so a bankruptcy filing will likely have a different impact on one Tennessee resident than it would another. However, there is one pro that is common in all Chapter 7 bankruptcy filings: the "automatic stay."

Some of our readers may be familiar with this part of the bankruptcy process, but, for those who are not, the automatic stay is a part of the court's orders which halts any effort by creditors or debt collectors to collect funds from the person who is filing for bankruptcy. That means any pending lawsuits or other collection efforts are paused for the time being.

The automatic stay can be particularly useful for Tennessee residents who are filing for Chapter 7 bankruptcy because they are in danger of losing their home in a foreclosure proceeding. The automatic stay will stop those proceedings, albeit temporarily. The automatic stay can also prevent a person from being evicted or having to face a cut-off of utility service.

Of course, even the automatic nature of the stay is sometimes not enough to stop creditors from pleading with the bankruptcy court to lift the stay. Any Tennessee resident who is thinking about the benefits of Chapter 7 bankruptcy will likely consider the automatic stay to be a big pro, but there are legal concerns for many people in the bankruptcy process as well. Those who have questions regarding bankruptcy should contact a lawyer.

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