In our last post, we looked briefly at some of the changes made by a recent bill signed into law by Governor Scott Walker. Those changes, as we noted, make it easier for creditors, including debt buyers, to validate debts in court and remove deterrents to pursuing ill-founded collection actions.

As we noted last time, one of the benefits of filing for bankruptcy is that a debtor is able to receive debt collection relief through an automatic stay. An automatic stay is an injunction issued by a bankruptcy court which puts a halt on all litigation, foreclosure proceedings, garnishment efforts, and debt collection activities against the debtor. An automatic stay goes into effect the moment a debtor files for bankruptcy.

The automatic stay is not, of course, enough on its own to justify a bankruptcy filing, but for debtors who are looking at the possibility of bankruptcy as the next logical step, the halting of collection proceedings is an important aspect of bankruptcy.

That being said, there are certain liabilities the automatic stay does not protect a debtor from, and some creditors are able to lift an automatic stay by filing a motion for relief. This often happens with mortgage lenders who aim to put a properly through foreclosure. Because of this, bankruptcy doesn’t provide full relief from all creditor actions. Debtors in bankruptcy do enjoy the protection of the court when creditors fail to abide by the automatic stay, though, so it is an important aspect of the bankruptcy process, particularly for debtors who have suffered months or years of aggressive collection efforts.