Buying the Right Home

When a bankruptcy attorney submits a petition to the court, the judge will almost automatically grant a stay. This is a legally binding order, and it goes to the creditors named in the bankruptcy petition. The stay will order them to cease all collection action until the court has heard the case.

A bankruptcy lawyer typically sees the stay as a powerful tool. You might wonder why it's such a big deal, so take a look at what a stay can accomplish.

Stopping Harassment

If you're at the point where bankruptcy is the best option for getting your financial life back on track, creditors are almost certainly harassing you. You might be afraid to pick up the phone or check your mail. Even the most aggressive ones will send emails and texts, and a few will even slip into your DMs on social media.

When a judge grants a stay, the court immediately notifies all creditors to terminate all harassing communications. If they need to discuss something with you, the court will direct them to contact your bankruptcy law attorney. Document all creditor communications after the judge issues the stay, and tell your lawyer about them. If necessary, the court can impose sanctions to punish creditors that don't get the point.

Delaying or Stopping Foreclosure

Regardless of the type of bankruptcy case, the court will at least put any impending foreclosure actions on pause. If you're trying to restructure your debts, you may be able to avoid foreclosure altogether and cram your mortgage into your repayment plan.

Be aware, though, that mortgages represent secured assets. If you're filing Chapter 7, the law provides few long-term options for keeping a mortgaged house within the liquidation process. However, the stay will at least buy you a few weeks to figure out what your living arrangements might be after bankruptcy.

Stalling Some Evictions

A landlord can usually evict someone in bankruptcy if they already have a judgment against them. Some states have laws that allow stays on pending evictions, so ask a bankruptcy attorney about the rules where you reside. If you're not currently facing eviction, though, a stay will prevent the landlord from seeking one while the case is pending.

Unless you can pay up once the bankruptcy is done, a landlord will likely initiate eviction proceedings at the first opportunity. If you're not confident you can catch up on rent, you should take advantage of the time to find other accommodations.

Reach out to a local bankruptcy lawyer to learn more.