Many Americans are struggling with financial debt, which the pandemic has exacerbated in many ways. Job losses, costly medical bills, and other expenses related to the pandemic have added extra strain to many individuals, families, and businesses. As you explore your debt relief options in New York, you may wonder whether bankruptcy can help you obtain the fresh start you need. One benefit of filing for bankruptcy is that this action prevents creditors from starting or continuing a lawsuit against you. Here is a brief overview of how filing for bankruptcy may protect you from civil lawsuits.
Understanding the Automatic Stay
The moment you file for bankruptcy, the court issues an automatic stay. This stops creditors from calling you, sending you letters, demanding payment, and filing or continuing a lawsuit against you. During this time, creditors can not hound you for money or contact you in any way. They also must stop wage garnishments or attempts to freeze your bank accounts.
Types of Lawsuits Bankruptcy May Stop
Some of the most common civil lawsuits that filing for bankruptcy will prevent or stop include those involving unpaid credit card balances, home foreclosures, breach of contract issues, financial disputes between business partners, and more. However, bankruptcy does not stop all lawsuits from moving forward. Divorce actions, child custody and child support disputes, and criminal cases will still proceed, even after a bankruptcy filing.
Compassionate and Effective Legal Guidance
It’s normal to feel overwhelmed and even embarrassed by your financial debt. While a negative stigma surrounding bankruptcy may persist for some, the reality is that bankruptcy can give you the opportunity to regain control of your financial situation and build a brighter future for you, your family, or your business. Working with a compassionate and experienced New York bankruptcy attorney is a great way to get and stay motivated as you move through the process. Together, you can lay a solid foundation for a brighter financial future.