When your finances begin to spiral out of control, you may find that it interferes with numerous parts of your life. Depending on how far in debt you are, you may be losing some of your professional earnings to wage garnishment. You may also find yourself on the receiving end of repeated phone calls from creditors.
While these and other possible repercussions associated with falling behind on your bills may prove frustrating, you may be able to seek temporary relief by filing for bankruptcy. Once you begin your bankruptcy case, something called the automatic stay takes effect. During this automatic stay period, certain creditors may no longer lawfully come after you. Just what types of protections does bankruptcy’s automatic stay allow?
Protection from utility disconnections
Falling behind on your finances is almost always anxiety-inducing, but you are also facing threats from your water or electrical service providers, you may feel even more out of control. It may give you some relief to recognize that, once the automatic stay takes effect, utility companies may not disconnect your services while your case remains open.
Protection from creditor harassment
Sick of dodging calls from creditors while at home or work? Once the automatic stay takes effect, credit card companies and others may no longer harass you or contact you at all while the case is ongoing.
Protection from wage garnishment
Getting your finances back under control may prove exponentially more difficult if you are also not receiving all of your earnings due to wage garnishment. Once you initiate bankruptcy proceedings and the stay takes effect, though, wage garnishments must cease until your case officially closes.
While bankruptcy’s automatic stay offers you relief and protection in several key areas, it, unfortunately, does not absolve you of all financial obligations. If you currently pay child support, for example, you must continue to do so, even once the automatic stay is in place.