While the threat of repossession and foreclosure (not to mention wage garnishment) can be as stressful and scary as it may be embarrassing and upsetting, the good news is that borrowers have recourse for protecting their assets, resolving their debt and obtaining a financial fresh start.
Filing for Bankruptcy: How the Automatic Stay Can Protect Your Assets
One of the best ways that borrowers who are buried in debt can protect their assets is to file for bankruptcy. Specifically, by filing for bankruptcy (either Chapter 7, Chapter 11 or Chapter 13), borrowers can immediately benefit from a court order known as an automatic stay, which will:
➡ Take effect as soon as a bankruptcy case is filed (and will remain in effect for the duration of the bankruptcy case)
➡ Prevent creditors from continuing to call, send letters to or otherwise contact borrowers who may owe them money
➡ Halt all legal actions that creditors may have taken (or be trying to take) against borrowers (This includes stopping foreclosure proceedings, preventing wage garnishments and halting action to repossess a person’s assets).