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What can bankruptcy’s automatic stay protect you against?

On Behalf of | Dec 11, 2019 | Bankruptcy

Considering whether bankruptcy might give you the relief you desperately need? If so, you may be thinking about doing so because the constant barrage of calls and communications from your creditors has become increasingly overwhelming, and you want to get them off your back. Filing for bankruptcy may be able to help you accomplish this, because once you initiate bankruptcy proceedings, something called the “automatic stay” takes effect.

Just what is an “automatic stay” in bankruptcy, and how can it help you when it comes to creditor harassment?

Understanding the automatic stay period

Once you begin the bankruptcy process, the bankruptcy court will issue the automatic stay, which is essentially a time period in which your creditors may no longer come after you to try to collect what you owe. While not permanent, the automatic stay period gives you temporary relief from your creditors while you navigate the bankruptcy process and work to get your financial affairs in order.

While bankruptcy’s automatic stay period does not free you from having to pay all debts (you would still have to pay any required child support payments, for example), it does give you temporary relief in a number of key areas.

What the automatic stay prevents

If your creditor is in the process of foreclosing on your home, bankruptcy’s automatic stay typically halts the process. However, if you fail to keep up with your mortgage payments during this period, your creditor may try to have the stay lifted. Similarly, if you are a renter and your landlord filed for your eviction, but does not yet have an eviction judgment in hand, the automatic stay may extend you temporary protection against eviction. In most cases, the automatic stay period protects you against utility disconnections and wage garnishments, if applicable, as well.

While bankruptcy’s automatic stay does not free you from all financial obligations, it may give you a chance to catch your breath and otherwise work out a plan that fits your needs.