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How the automatic stay helps bankruptcy filers

| Sep 30, 2020 | Bankruptcy

The automatic stay is one of the many protections of personal bankruptcy. When a struggling consumer has made the decision to file for personal bankruptcy protection, in addition to the protections of the bankruptcy process itself, they should also be familiar with the protections associated with the automatic stay.

How the automatic stay can help bankruptcy filers

The automatic stay goes into effect once the filing party files for personal bankruptcy protection. In addition to preventing creditor collection actions from proceeding during the bankruptcy process, it can also provide several specific protections to filing parties including:

  • Foreclosure protection – the automatic stay may be able to help filing parties with the foreclosure process and may be able to stop it. Personal bankruptcy options may be able to provide more permanent help with foreclosure.
  • Eviction protection – the automatic stay may be able to help filing parties with eviction in some circumstances so filing parties should be familiar with the protections it may provide in regard to eviction.
  • Stop utility disconnection – the automatic stay may be able to stop the filing party’s utilities from being disconnected for up to 20 days. Worrying about having utilities disconnected can be a significant concern for filing parties.
  • Wage garnishment protection – the automatic stay may be able to stop wage garnishment. Wage garnishment can cause significant stress for filing parties who are trying to pay their bills and the automatic stay may be able to help.
  • Stop government agencies from taking back overpayment of public benefits – the automatic stay may be able to prevent the government from taking back any overpayment of public benefits.

Bankruptcy protections are an essential tool for struggling consumers to be familiar and the automatic stay can provide breathing room. Both personal bankruptcy protections and the automatic stay can help filing parties enjoy a fresh financial start.