2. Stay of proceedings

When you file for , there is an automatic “stay of proceedings”. This means that your unsecured creditors cannot sue you, take your money, or ask for payment. An is a that does not have for their debt.

Secured creditors are not covered by a stay of proceedings. A is a creditor that holds collateral for your debt. Common examples of secured are:

  • mortgage: the house is the collateral
  • car loan: the car is the collateral

With a , if you do not pay what you owe or if you stop making regular payments, the creditor can take the collateral instead.

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