When you file for bankruptcy, you’re acknowledging that you aren’t able to pay your debts. This triggers a legal process in which your case is handled by the court. If you’re filing a Chapter 7 bankruptcy, your nonexempt assets are liquidated to pay off the creditors. If you’re filing a Chapter 13, you’ll make regular payments to the bankruptcy trustee. Once the money from the liquidation or payments is exhausted, the balances that remain on the debts are discharged and the case is done. 

There is one important benefit that many filers appreciate when their case begins – the automatic stay. This is a court order that forbids creditors from contacting you to collect the money they are due. They must go through the bankruptcy court if they want to receive a payment for the bills. 

The automatic stay includes all forms of communication. Your creditors can’t call you, contact you via electronic means, or send you mail to collect. They also can’t send someone to your home to collect. 

It’s important for the automatic stay to be followed because trying to collect on a debt that’s part of a bankruptcy case could put the creditor on an uneven playing field. There is a specific order that debts are handled during bankruptcy, and it’s imperative that it’s followed so that no creditor gets more than their share while others receive less than they’re due. 

If you need to find out more about the automatic stay and how it might impact you, be sure to ask your attorney. You need to be well aware of all aspects of filing so you can ensure you’re doing what’s best for you.