Often, clients come to me after they have been sued by a creditor, and they are worried that a creditor will exercise a lien or garnishment on their assets. Fortunately, Bankruptcy offers protection under section 362 of the code.

The “automatic Stay” is perhaps the most important protection provided to debtors. It is a powerful tool that stops creditors in their tracks. The automatic stay is the creditor’s nightmare, and the debtor’s best friend.

The filing of a bankruptcy petition operates as an injunction, and shuts off all collection action by all creditors against the debtor. Upon the filing, the Court sends a notice to every creditor listed on the Bankruptcy petition telling them that the Automatic Stay is in force.

The automatic stay demands an immediate STOP to all collection calls, collection letters, lawsuits, bank levies, wage garnishments, car repossession, foreclosure, and eviction actions that were commenced or could have been commenced prior to the bankruptcy filing.

My clients are amazed when I tell them that all the nasty, aggressive creditors will be frozen immediately, and they can have some peace back in their lives. All thanks to the Automatic Stay.