The Power of a Bankruptcy Automatic Stay

Legal protection against creditors is automatic once you file for Bankruptcy

One of the most fundamental protections for individuals filing for bankruptcy is the automatic stay. A bankruptcy automatic stay goes into effect the instant a bankruptcy petition is filed, and is commonly referred to as bankruptcy protection. Bankruptcy protection is just that: Protection. Once an automatic stay goes into effect, you are protected from:

• Lawsuits being filed against you
• Liens on any of your property
• Creditor collection efforts
• Collection agency collection efforts
• Government collection efforts

In fact, the automatic stay is like pressing a button that simply stops creditors dead in their tracks. A bankruptcy automatic stay is a powerful arsenal at your disposal in filing for bankruptcy and will grant you the relief you need if you are at risk of:

• Being evicted
• Contempt for failure to pay child support
• Foreclosure
• Disconnection of utility services
• Wage garnishments

Filing for bankruptcy will allow you the opportunity to reevaluate your financial condition without having to defend against an onslaught of creditors at the same time.

Common Emergencies That an Automatic Stay Can Delay

Utility Disconnection: A bankruptcy automatic stay will keep your utilities from being disconnected. If any of your utilities are close to being turned off due to nonpayment, the stay will protect you for a period of at least 20 days. Utility services covered are water, electric, gas, and telephone service.

Foreclosure: You don’t have to lose your home through foreclosure if you plan to file for bankruptcy, at least not right away. If you are close to losing your home, the automatic stay puts a temporary hold on these proceedings and you may even be able to keep your home if you file for Chapter 13 bankruptcy.

Multiple Wage Garnishments: This is another common emergency that an automatic stay will delay. If you choose to file for bankruptcy, you can delay wage garnishments, receive your full salary, and possibly get all or most of the debts discharged so that you don’t have to worry about future wage garnishments.

Eviction: If you are facing eviction, a bankruptcy automatic stay may help delay these proceedings, but may not completely prevent them. Current bankruptcy laws tend to lean in favor of the landlord’s ability to continue with the eviction process, especially if your landlord had already filed an eviction notice with the courts prior to your filing for bankruptcy.

Understanding the automatic stay and what it will and will not cover is an intricate process that should not be taken for granted. It’s important to consult with an experienced bankruptcy attorney.

At Allmand and Lee, we have experienced bankruptcy attorneys who can help you down this hard road and on toward a better future. Please fill out our free and confidential evaluation form to see how we can help you. We have helped thousands of others resolve their financial crisis and get through this tough situation, and we can help you too.