There are many things that bankruptcy protection can do to help struggling consumers. One way that bankruptcy protection can helping struggling consumers is the automatic stay that goes into effect once the filing party has filed for bankruptcy protection. They should understand the ways it can help, as well as the ways personal bankruptcy protection can provide debt relief.
Ways the automatic stay can help
The automatic stay brings a halt collection efforts by creditors, collection agencies, government entities or another individual seeking money from the filing party.
- Wage garnishment: filing for bankruptcy will stop all wage garnishments during the bankruptcy process through the automatic stay protection.
- Stop utility disconnection: filing for bankruptcy can stop the filing party’s utilities from being disconnected for at least 20 days through the automatic stay protection.
- Stop foreclosure proceedings: filing for bankruptcy can stop foreclosure proceedings through the automatic stay protection but different types of personal bankruptcy may be able to provide more long term relief that filing party’s should be aware of.
- Stop eviction proceedings: filing for bankruptcy can delay eviction proceedings in certain circumstances.
- Stopping the government from pursuing repayment of public benefits: filing for bankruptcy can prevent the repayment of overpayment of public benefits through the automatic stay protection.
The automatic stay is in effect for the duration of the bankruptcy process. It can provide some immediate relief for filing parties filing for Chapter 13 or Chapter 7 bankruptcy. For that reason, struggling consumers should be familiar with the many protections of personal bankruptcy including the automatic stay.