Putting a stop to the harassing phone calls, threatening letters and taunts of credit damage is something every debtor in over the heads needs. That is why one of the biggest perks reported by consumers filing for Houston bankruptcy is the protection from creditors through the automatic stay.
The automatic stay is a powerful order issued by the court and served to all of your creditors. Once received, your creditors are prohibited from contacting you or making further efforts towards collection. If a creditor violates this rule they could be facing consequences with the court.
When is it served? When you file for bankruptcy petition with the court, the automatic stay is the first order issued. It goes into effect immediately and stays in place throughout the duration of your case.
What does it cover? The automatic stay covers all eligible secured and unsecured debts. Debts such as domestic support payments, delinquent property taxes, or criminal restitution payments are not eligible for bankruptcy discharge and, therefore, not eligible for protection under the automatic stay.
When will it end? Typically the order is permanent for all debts that were eligible for, and received, a debt discharge. However, there are instances in which a creditor can have the order lifted, or the court issue its lift on specific debts. Further, any debts that were not eligible for a discharge in the first place will not be protected after the case is completed.