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Chapter 13 Bankruptcy And The Benefits Of Automatic Stay

Chapter 13 bankruptcy offers a flexible and more reliable solution for people looking to settle their debts. It is suitable for people with a regular income but an overwhelming amount of debt. Through Chapter 13 bankruptcy California, the applicant gets 3-5 years of debt repayment plans with reduced interest. At the end of the tenure, the debt payment is compared with the debt balance. If the compared amount is less, the remaining debt is discharged. Essentially, Chapter 13 bankruptcy in California allows you to get caught up on past-due payments during a structured 3 - 5 year plan and repayment. This way, Chapter 13 bankruptcy California can stop certain things, like foreclosure, repossessions, wage garnishments, and judgments, etc. 


Chapter 13 bankruptcy is a desirable option for people who want relief from the high levels of secured debt on payments from valuable properties that they have acquired without losing that asset or secured debt. The bankruptcy gives the client breathing room to get caught up and discharge a portion of the debts while keeping their property and secured assets. In the repayment plan, some part of your unsecured debt is lifted, so you won’t have to make the payments of that part of the debt, and it is successfully discharged.   

Benefits Of The Automatic Stay   

Any chapter of bankruptcy includes an inherent injunction, known as automatic stay. A court order prohibits the continuation of any action by any creditor against the debtor or the property is issued as soon as a bankruptcy case under Chapter 13 bankruptcy California is filed. Even if the creditor hasn’t received official notice or a copy of bankruptcy, the automatic stay is still enforceable. The stay is intended to protect the debtor’s assets, and allow them some time away from the court case.   

Automatic Stay Offers A Variety Of Benefits  

However, not many people are aware that Chapter 13 bankruptcy California offers a lot of protection to debtors. One of the benefits is the automatic stay, which helps stop all actions taken by collection agencies to collect dues from you. One of the benefits of automatic stay is that it comes to your and your family’s aid in times of financial mess. Los Angeles-based law firm, Recovery Law Group, has listed some of the benefits of automatic stay, which include:  

In case you are about to get your utilities, like electricity, water, and gas disconnected due to non-payment of dues. This is one of the benefits of automatic stay as you can postpone the process of disconnection for a minimum of 20 days, giving you a respite as well as time to make repayments. 

Another benefit of the automatic stay is that it postpones any proceedings taking place for foreclosure in case the home mortgage is at risk. It’s important that you file under Chapter 13 bankruptcy California, in case you wish to keep your house during the bankruptcy process.   

Many creditors resort to wage garnishment to clear the debts they owe. However, with automatic stay in place, any action taking a part of your salary by collection agencies is not allowed.   

Moreover, any public benefit overpayments that you have received via checks, might be collected by debt collection agencies in normal circumstances. One more benefit of the automatic stay is that it prevents facing eviction due to non-payment of rent. 


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