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Many advantages of a Chapter 13 automatic stay

One of the advantages of filing for Chapter 13 bankruptcy in Florida is the issuance of an automatic stay. An automatic stay prevents a debtor's creditors from taking any further action to collect on the debt. The automatic stay starts when the debtor files the petition for bankruptcy. Judicial action is generally not needed for an automatic stay - as the name indicates, it happens automatically.

Some actions that may be prohibited by an automatic stay include the garnishment of the debtor's wages, a lawsuit or threatening phone calls that demand that the debtor pay back the creditor. That being said, depending on the situation, the automatic stay may be limited to a certain period of time.

An automatic stay in a Chapter 13 bankruptcy can also safeguard the debtor's co-debtors. In these circumstances, a debtor's creditor cannot pursue payments on a consumer debt from a co-debtor if there is an automatic stay, unless the court says otherwise.

A Chapter 13 automatic stay may also save a person's home from being foreclosed upon. Once the petition for Chapter 13 bankruptcy is filed, a creditor cannot seek payments on the home mortgage. This gives the debtor time to become current on their home loan. However, if the foreclosure was completed prior to the filing of the Chapter 13 bankruptcy, an automatic stay cannot save a person's home.

As this shows, the automatic stay is a powerful tool available to a person after he or she files for Chapter 13 bankruptcy. Those with further questions about automatic stays and other forms of debt relief can contact a Florida bankruptcy attorney to learn more about the process.

Source: United States Courts, "Chapter 13 - Bankruptcy Basics," accessed June 3, 2015

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