What is an Automatic Stay?
By: Julie Koenig
On the date that you file there is something called the “automatic stay” that comes into effect. No creditor can call you, no creditor can demand payment from you, all lawsuits are stopped and no creditor can file a new lawsuit. It, unfortunately, also applies to your car and house payments. If you receive a monthly statement for your car and/or home loan payment or are set up on an electronic withdrawal, you will no longer receive your monthly statement or automatic withdrawal. These monthly statements and/or automatic withdrawals are considered a demand for payment and are subject to the automatic stay. Don’t be worried - if you normally receive a monthly statement, just make 3 - 4 copies of the last one you received before filing and make your normal monthly payment using the copies - they can accept your payment, they just cannot ask for one. If you are set up on an automatic withdrawal from your checking account, simply stop the automatic withdrawal before you file, ask for a monthly statement, make copies, and keep making the payment. This is assuming that you want to keep your car or home. If you do not wish to keep your car or home, just stop making the payments and we will arrange for you to surrender your car and/or home during the bankruptcy process.
Please be aware that certain types of debt, including but not limited to, child support, child custody, and/or criminal restitution are not subject to the automatic stay and these creditors may continue their collections/lawsuits against you during the bankruptcy process.