What can bankruptcy’s automatic stay protect you against?

Getting behind on your bills can prove immensely stressful, particularly if you also field communications from creditors threatening to turn your lights off or otherwise make your life more difficult. If your finances have spun far enough out of control that you now dodge regular calls from creditors, you may consider whether you could find some relief through filing for bankruptcy.

Once you officially begin the bankruptcy process, the court will issue an order known as “automatic stay.” Just what does this order do, and how can it help you find relief from your creditors?

Understanding automatic stay

The automatic stay period that follows a bankruptcy filing is a time in which your creditors can no longer continue to contact you as they work to collect what you owe them. In other words, the automatic stay period grants you temporary relief from creditors. In most cases, it lasts for somewhere around 90 to 120 days. During this time, your creditors must cease communications with you while you work out your bankruptcy case and financial affairs. This holds true regardless of whether you initiate Chapter 7 bankruptcy proceedings or Chapter 13.

Automatic stay protections

Just what types of creditors can bankruptcy’s automatic stay temporarily protect you against? For starters, if you have your electrical or water company threatening to disconnect your services, they can no longer do so for unpaid bills during the automatic stay period. Also, if you face eviction or foreclosure, bankruptcy’s automatic stay can grant you temporary protection.

Typically, filing for bankruptcy and starting the automatic stay period halts foreclosure proceedings relating to your property. Similarly, if your landlord has filed for your eviction but has not yet received an eviction judgment against you from the court, the automatic stay period should prevent him or her from evicting you, at least for the time being.

While bankruptcy’s automatic stay can grant you temporary protection against creditors, foreclosures, evictions and utility disconnections, please note that this is not a comprehensive summary of all the protections it may temporarily offer you.

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