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Automatic stay buys time for consumers to manage debts

When a Florida resident files for bankruptcy protection, the court creates an injunction against creditors called an automatic stay. With a few exceptions for debts like taxes and child support, the stay blocks lawsuits filed by creditors, individuals, collection agencies or government agencies. The stay could grant the person time to negotiate new terms for the payment of debts.

This legal protection might allow a person to delay the shut off of utilities or an eviction. The prevention of wage garnishment could also be achieved with a stay. When successful, this action would allow a person to collect a full salary while the bankruptcy proceedings continue.

Receiving a notice of foreclosure presents another emergency situation that could prompt a person to file for bankruptcy. An automatic stay also has the power to halt the foreclosure process temporarily. When saving a home is a priority for a person, filing for a Chapter 13 bankruptcy could lead to a new payment plan that gives the homeowner a way to keep up on payments instead of falling behind. However, not all lawsuits are affected by the automatic stay, and even if they are, the stay is often removed in some cases.

A person confronted by this problem may want to have the assistance of an lawyer who represents debtors and understands consumers’ rights. An lawyer could evaluate the income and debts of the client and determine if a Chapter 13 bankruptcy filing would be appropriate. Not everyone is eligible to file under this chapter, however, and the lawyer can explain what the requirements are.

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