Why Should You Choose Bankruptcy? The Automatic Stay

Author: Smith Bryan

Bankruptcy works by protecting you from your creditors when you are no longer able to pay your debts. The most powerful function of a bankruptcy is called the “Automatic Stay”.

The automatic stay goes into effect the second your bankruptcy case is filed with the court. The automatic stay is like a wall that goes straight up and blocks your creditors. This wall leaves creditors behind you on the other side of the wall. They are unable to report more bad information on your credit report were collected at area you are on the safe side of the wall from these creditors. You can leave them behind and move forward with your life getting the fresh financial start that you need.

Many people think that if their bankruptcy is dismissed, they could just file again. While it is true that generally speaking, you can re-file for bankruptcy, the 2005 amendments to the bankruptcy code created a potential to seriously limit what is the main advantage of a bankruptcy to a debtor who is filing for bankruptcy. The Automatic Stay!

This is an order by the bankruptcy court that immediately stops, or stays, all collection actions against you. This means that foreclosures, garnishments, attachments, lawsuits, collection calls and letters and even regular monthly bills are stopped.

Some creditors willfully violate the automatic stay when their debtors file bankruptcy. Once a court has held that a creditor has violated the automatic stay, it turns to the issue of damages. Certainly verifiable out of pocket expenses suffered by the debtor are fully recoverable. So are the bankruptcy attorney fees incurred for having to bring the motion or adversary proceeding.

But are the emotional damages recoverable by the debtor? Many, if not most bankruptcy courts have held that emotional damages are recoverable from a creditor who has violated the automatic stay. They concluded that the intent of Congress was to compensate for emotional damages because of the stated legislative intent to give debtors a breathing spell from creditor harassment. Recently, the firm on bankruptcy court held that; “Emotional distress is an actual injury. Legitimate human emotions are brought to bear when one’s rights are trampled on.”

If you file a second bankruptcy to extend the automatic stay, do not think that the judge will automatically extend the automatic stay because you are good people. The judge is not there to give sympathy to he or she, but there to decide issues of law solely. You are presumed to file for bankruptcy the second time in bad faith. It is your job to prove to the judge that this is not bad faith but rather that you have stepped up to the plate and changed your circumstances in order to successfully complete your case. It is your job to take an active interest in your bankruptcy case. Ask questions and stay informed about your bankruptcy filing. You will only be successful in your bankruptcy if you get involved stay involved throughout the entire process of your filing. This is your life, take control and regain financial control.

Article Source: http://www.articlesbase.com/bankruptcy-articles/why-should-you-choose-bankruptcy-the-automatic-stay-1277941.html

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