Having creditors constantly call your home or cellphone may prove anxiety-inducing, but if they start to call you at work, too, you may feel even more pressure. If your finances have spun out of control to the point where there is no realistic way to dig yourself out of debt, you may be considering bankruptcy as a potential means of finding some relief.
According to LendingTree, once you file for bankruptcy, you initiate something called the “automatic stay.” The automatic stay is a stretch of time in which most of your creditors must stop calling you while you work through the details of your bankruptcy case. What sorts of protections do you enjoy, at least temporarily, while the automatic stay remains in effect?
Protection from wage garnishment
If your employer is garnishing part of your wages due to you having outstanding debts, this ceases during the automatic stay period. During this time, you should be able to receive your regular paycheck in its entirety.
Protection from utility disconnections
If your water or electric company has threatened to shut off services, it may not do so while the automatic stay is in effect.
Protection from foreclosure or eviction
Bankruptcy’s automatic stay also typically halts foreclosure or eviction proceedings against you. However, there are some exceptions. If you owe money on your rent or mortgage and your creditor files to have the stay lifted, you may still face eviction or foreclosure if you are unable to keep current on payments.
These are some, but not all, of the protections bankruptcy’s automatic stay offers you once you begin your bankruptcy case. Keep in mind that any domestic support payments you must make are still due as usual even when the automatic stay is in effect.