Previous posts here have mentioned that New York residents who are facing financial challenges need to weigh the “pros” and “cons” of filing for bankruptcy. While some people may believe that there are more drawbacks to filing for bankruptcy than there are benefits, that isn’t necessarily true. One powerful benefit of filing for bankruptcy is an automatic stay on creditor collection efforts.
Harassing calls and lawsuits from creditors and collection agencies can drive a person crazy. That is why the automatic stay that is granted under bankruptcy law can be such an important tool for New York residents. When the most serious of debts are being called in — like a mortgage or utility bills — and threats are coming about taking your home or turning off your electricity and water, the automatic stay will put a “pause” on these issues. This can be just the right amount of breathing room an individual or family needs in order to get a handle on financial problems.
But, there are also some types of financial commitments that will not be impacted by the automatic stay, such as child support obligations or restitution that has been ordered in criminal cases. Fortunately, however, with other debt obligations put on pause by the automatic stay, that may free up funds for these other financial commitments.
Personal bankruptcy is an option for consumers to address debt concerns and get their finances in order once again. New York residents who are exploring this option need to be aware of both the positive and negative aspects of a bankruptcy filing.
Source: FindLaw, “The Automatic Stay: Stopping Creditors with Bankruptcy,” Accessed April 22, 2017
