Is The Automatic Stay Really Automatic?
The automatic stay is unquestionably the most powerful tool of bankruptcy. In plain English, it means that the instant your bankruptcy petition is fi led with the court a stay will automatically go into effect, and all collection efforts taken against you must cease immediately. This means no more harassing dinnertime phone calls from Portfolio Recovery Associates regarding that medical bill you incurred seven years ago when you were in between jobs and uninsured for three months. It means no more threatening notices in the mail from Cach LLC stemming from
that old car loan you didn’t quite fi nish paying off. It means Stephen Einstein & Associates must drop their collection lawsuit from that old Discover Card debt you incurred when you obtained your first credit card in college 10 years ago. Creditors who continue collection efforts even after receiving notice of a bankruptcy fi ling risk being sanctioned by the bankruptcy court for violating the automatic stay.