Law Office of Ruth Nelson
What Can Bankruptcy Do For Me?

How a stay is used duing bankruptcy

On Behalf of | Apr 21, 2015 | Creditors' Rights

When someone is thinking about filing for bankruptcy in Washington, he or she is almost certainly having trouble paying the bills — even the significant ones like his or her mortgage and electricity. While filing for bankruptcy can have a long-term impact, it’s also important to note that it can significantly change things in the short term since it means an automatic stay will be used until the case is completed.

So, what does a stay do? It means the borrower gets to legally wait to pay his or her bills. If the electric company is thinking of turning off the lights or the gas company is going to shut down the gas — and, therefore, the heat — because the borrower hasn’t paid, the stay buys him or her time. It means those utilities must stay on and the borrower gets to settle the debt with the rest of the case.

A stay also means that a mortgage lender cannot foreclose on a home until the bankruptcy case, which has a higher level of importance, is done. This is true even if the foreclosure process has already begun. Some borrowers will use bankruptcy just so that a lender has no choice but to back off and wait, as it is a legal obligation. After the bankruptcy case is done, the foreclosure case –if it is still necessary — just picks up where it left off.

As you can see, an automatic stay can be a huge part of the bankruptcy process, altering the rights of both creditors and debtors. If you’d like to learn more about how this whole process works, we hope you’ll take a moment to check out our webpage.

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Law Office of Ruth Nelson
7742 14th Avenue NW
Seattle, WA 98117
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