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What can bankruptcy’s automatic stay protect you against?

On Behalf of | Aug 17, 2020 | Bankruptcy

When your finances start spiraling out of control due to job loss, medical bills or something similar, you may be looking for a way to dig yourself out of debt and make things more manageable. If you are considering filing for personal bankruptcy, doing so may give you temporary relief from some of your financial obligations while you navigate your bankruptcy case.

According to LendingTree, this temporary relief comes in the form of something called the automatic stay, which takes effect as soon as you start bankruptcy proceedings. During the automatic stay period, certain creditors must stop coming after you in their efforts to collect what you owe. What are some of the temporary protections the automatic stay allows you?

Protection against utility disconnections

If you have started receiving threats from your electric or water providers due to nonpayment of bills, they must stop coming after you during the automatic stay period. They are not able to contact you about collecting what you owe during this time, and they may not disconnect your services during it, either.

Protection against wage garnishment

If your debts have reached a point where you are having a percentage of your wages garnished, bankruptcy’s automatic stay should bring you some relief. During the stay, your employer must pay you the full amount owed.

Protection from creditor harassment

Receiving a constant barrage of phone calls from creditors is often anxiety-inducing. Creditors and debt collectors are not lawfully able to continue to contact you during the automatic stay period.

Protection against foreclosure or eviction

While there are a few exceptions, your landlord typically does not have the right to evict you during the automatic stay period. The automatic stay also puts a stop to foreclosure proceedings in most cases.