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Help for bankruptcy filers through the automatic stay

| Oct 14, 2020 | Bankruptcy

Personal bankruptcy protections can provide important protections to filing parties as soon as they have filed for bankruptcy relief all the way through to their debt discharge. One protection is the automatic stay that goes into effect once the filing party files for bankruptcy. Struggling consumers should be familiar with the protections of the automatic stay.

Automatic stay protections

The automatic stay can provide a variety of different protections for filing parties. In addition to stopping creditor collection actions during the bankruptcy process, the automatic stay can provide specific protections including:

  • Stopping utility disconnection – the automatic stay may be able to stop the filing party’s utilities from being disconnected for at least 20 days.
  • Stopping eviction – in some circumstances, the automatic stay may be able to stop the eviction process.
  • Stopping foreclosure – in some circumstances, the automatic stay may be able to stop the foreclosure process and certain personal bankruptcy protection options may be able to provide longer-term help for struggling homeowners.
  • Stopping wage garnishment – the automatic stay may be able to stop wage garnishment which can relieve a significant burden for filing parties.
  • Stopping recovery of overpayment of public benefits – the automatic stay may be able to prevent the government from recovering any overpayments of public benefits made to the filing party.

Fresh financial start

Bankruptcy can provide the opportunity for a fresh financial start and debt relief. Part of that process includes protections offered by the automatic stay. The automatic stay provides valuable protections during the bankruptcy process that filing parties should be familiar with.