Calls, emails and letters from creditors create anxiety when you face debt you cannot repay. When you file for bankruptcy, you receive relief from creditor attempts to collect on past-due bills.
Review the terms of the automatic stay in Texas bankruptcy and learn how it stops collection firms from contacting you.
When you file for bankruptcy, you receive a court order called an automatic stay. This injunction takes effect as soon as you submit your bankruptcy petition and prevents creditors from:
- Repossessing collateral, such as an automobile
- Obtaining a lien on accounts or assets
- Filing or continuing a legal case against you
- Foreclosing on your property
- Contacting you in any way, including emails, texts or letters
Your attorney can take action when creditors continue the above after your bankruptcy filing.
If you decide to keep certain assets such as your car or your home, you must reaffirm the debt on those items. That means if you have an auto loan or mortgage, you must agree to continue paying off the loan even in bankruptcy. If you do not make these payments, the lender can begin collection actions despite the automatic stay.
When the court approves your bankruptcy filings, the judge will discharge eligible debts. After you receive the discharge order, however, collection can resume on debt that you cannot discharge in bankruptcy. This category includes student loans, money owed in association with criminal charges, income taxes from the past three years, and past-due spousal support and child support.
If you have mounting debt, consider bankruptcy to end the unwanted creditor calls and the financial uncertainty.