What can bankruptcy’s “automatic stay” protect you against?
As someone who has decided to file for bankruptcy, you may have done so in an attempt to stop the seemingly constant onslaught of phone calls from debt collectors. Such calls can prove, at best, a nuisance, and you may also have concerns about how it looks to have debt collectors calling you up at your place of business.
By filing for bankruptcy, though, you can put a stop to these persistent phone calls, and this happens because of something called “automatic stay.” Just what is automatic stay? Once you initiate bankruptcy proceedings, the automatic stay takes effect, and your creditors can no longer attempt to collect on certain debts during this timeframe. Just what can bankruptcy’s automatic stay protect you against, in addition to creditor harassment?
Typically, filing for bankruptcy will, at least temporarily, put a stop to a foreclosure against your house. If you do not stay current on your mortgage payments, though, your creditor may file to have the automatic stay removed, so you still need to keep up with your payments during this time.
If you are renting your home and your landlord filed to have you evicted, but he or she is not yet in possession of the eviction judgment from the housing court, bankruptcy’s automatic stay should stop the eviction process. As is the case with mortgage payments, though, your landlord may still be able to evict you if you fail to keep up with your rent.
If you are experiencing one of your creditors taking some of your wages at work, bankruptcy’s automatic stay can also put a stop to the garnishment.
While these are some of the things the automatic stay can protect you against, it is important to note that there are certain debts, such as child support obligations and evictions with judgments, that it typically will not cover.