The automatic stay protects debtors from creditor collections upon the filing of the bankruptcy petition. Avoidance of collection activity is a common reason for bankruptcy filing. Understanding what collection efforts a creditor may take is essential to understanding the benefits of the automatic stay.

Competency questions:

1. What types of collection activities does the automatic stay prevent?
2. What collection efforts may be employed if the automatic stay is not in place?

draft a one- to two- page memo on the automatic stay provision and its effect on Sara's case, using the fact pattern below. Be sure to use proper office memo form. Cite all sources using the Bluebook format.

Fact Pattern

Sara Wellborn had never been in debt until she lost her job. Thanks to her good credit, she used her credit cards to pay her rent, utilities and other monthly expenses. After six months, Sara finally was able to find a job, but her salary was less than half of her prior salary. Sara was earning $45,000 gross annually but her new job pays only $20,000 gross annually. Sara fell behind in her credit card payments, and the ABC Credit Card Company sued her and obtained a judgment against Sara for $10,000. ABC stated it would seek to attach her wages to repay the debt. Sara owes a total of $6,000 to five other credit card companies. Two of these companies also have filed suit again Sara but have not yet obtained judgments against Sara.

Sara cannot afford to have any of her wages taken and wants to file a Chapter 7 bankruptcy. Sara does not own a home but owns a vehicle. Her vehicle is worth $4,000, but she owes $6,000 and is two months behind on her car payments of $350.00 per month.

Based on the above information, analyze what effect the automatic stay provision will have on Sara's case and her situation if she files for bankruptcy now.