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An
automatic stay is a temporary measure that is
put into place automatically once a petition for
bankruptcy has been filed by an individual or a
company. Once an automatic stay is in place, the
injunction prohibits creditors from taking certain
actions against the debtor such as proceeding with
lawsuits, attempting to collect debt, initiating
foreclosure measures or garnishing wages. While it
might seem an automatic stay is unfair to
creditors, it actually can result in a more
equitable distribution of bankruptcy assets
because an automatic stay prevents an aggressive
creditor from being able to lay claim to a large
percentage of the person or entity’s assets before
others have a chance. |
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