Having your finances spin out of control is stressful on its own, but if you are also facing constant calls and threats from creditors, you may be at your wit’s end. You may be exploring the idea of filing for bankruptcy to help get things back on track. If you do, something called the automatic stay takes effect once you file.
The automatic stay is a stretch of time in which certain creditors must stop contacting or threatening you while you work through your bankruptcy case. What sorts of protections does bankruptcy’s automatic stay offer?
Protection against utility disconnections
If your water or electric companies are threatening to cut off your services, they may not do so once the automatic stay period takes effect. There is one possible exception. If the service provider asks you for a deposit during this time, the bankruptcy court may allow it to do so.
Protection against eviction
Bankruptcy’s automatic stay also gives you some relief from eviction. Unless your landlord asks the court to lift the stay due to ongoing missed payments or was in possession of an eviction judgment before you initiated your bankruptcy case, he or she may not evict you during the automatic stay period.
Protection against wage garnishment
If you have reached the point where your employer is garnishing a percentage of what you earn, you may also get temporary relief from wage garnishment during the automatic stay period. As long as your bankruptcy case remains ongoing, you should be able to take home your full pay.