Facing a significant amount of debt is stressful, especially if you feel like you do not have much control over your current financial state. One of the most stress-inducing aspects of having a lot of debt is getting constant phone calls from debt collectors and enduring other types of creditor actions. By choosing to file for consumer bankruptcy, you can make some of these actions stop.
The automatic stay will start after an applicant files for bankruptcy. This stops all contact from debt collectors and creditors, and it will also halt any collections actions against you. This can provide you with some relief as you navigate the bankruptcy process and meet all of the requirements. Bankruptcy is often a reasonable and beneficial option for many overwhelmed consumers.
What does it do?
The automatic stay means that creditors can no longer contact you, and they can no longer attempt to collect money from you. It will halt certain processes, including the following:
- It will halt any foreclosure proceedings already underway against you, allowing you to stay in your home.
- It will stop any eviction process against you already initiated by your landlord.
- It will stop the wage garnishment process, allowing you to keep your entire paycheck.
- It can stop the disconnection of your utilities, allowing you to keep your phone, gas, electric and other services.
While the automatic stay can provide many benefits, there are limits to what it can do. For example, it cannot stop any attempts to collect on past-due child support. It also cannot stop any criminal proceedings underway against you, and the automatic stay will not shield you from any penalties from owing past-due taxes.
Other benefits of bankruptcy
While the automatic stay is a beneficial aspect of filing for bankruptcy, the main benefit for you will be the ability to deal with certain types of debt that have been burdening you for months or even years. Whether it’s through a debt repayment plan or debt discharge, you could emerge from this process with a better financial future in sight.