Being harassed by creditors can be a major motivating factor in the decision to declare bankruptcy. Not only are the constant phone calls annoying, but you may also be facing the loss of your home or vehicles. These dire straits call for quick action, and the automatic stay offered with a bankruptcy filing can bring an immediate halt to most or all debt collection, foreclosure and eviction proceedings. If you need quick relief, read on for more information about what an automatic stay can and cannot do for you.
An automatic stay can:
- If you have money being taken from your wages for garnishment, the automatic stay will end that deduction immediately upon filing. The financial issue that led to the garnishment in the first place may not be dischargable with your bankruptcy, however. If applicable, being able to take home your entire salary should bring some immediate relief to your financial situation.
- It will temporarily stop foreclosure proceedings on your home. Depending on your lender and how much you owe, you may still end up losing your home, but this temporary reprieve could give you some time to make other arrangements or bring your mortgage up to date.
- Most utility disconnections, such as telephone, water, gas and electricity, will be delayed for at least 20 more days.
- All collection activity from unsecured debt, such as credit card debt, will cease immediately upon filing. You may continue to receive calls for a short period of time since there may be lag between your filing and the creditors getting the information. In that instance, just provide the caller with the name and phone number of your bankruptcy lawyer.
An automatic stay cannot:
- It will not relieve you of the responsibility of child support or spousal support (alimony), and any wage garnishments because of those debts will proceed.
- Although it could keep the I.R.S from placing a lien on your property (temporarily), it won't eliminate your responsibility to continue to make tax payments, such as installment agreements.
- You will still owe fines and fees to the courts for criminal acts.
The automatic stay allows you time to reorganize your finances and prioritize your debts. For example, you may be able to funnel money toward a mortgage that is in arrears instead of making the minimum payments on credit cards. For more information, contact Greg Dunn Bankruptcy Attorney or a similar legal professional.Share