While bankruptcy can certainly have that effect, it's important to remember that bankruptcy is a legal process that individuals can use to get relief. And one of the key benefits of bankruptcy is the automatic stay. An automatic stay is a court order that goes into effect immediately upon the filing of a bankruptcy petition. It prohibits creditors from taking any action to collect on debts owed by the debtor. The automatic stay gives debtors some much-needed breathing room while they figure out their financial situation and develop a plan to get back on their feet. Here are five protections you get when your bankruptcy attorney gets an automatic stay:
1. Protection Against Foreclosure
When you file for bankruptcy, your automatic stay protects you from overzealous landlords and rent collectors. They are not allowed to evict you or harass you for rent payments. If they do, they can be held in contempt of court. This means that they could end up with a hefty financial penalty, which may motivate them to stop their harassing behavior.
2. Protection Against Utility Disconnection
Your bankruptcy also gives you protection against having your utilities disconnected. This is especially important if you live in a cold climate and rely on heat to keep your home livable. If your utilities are disconnected, you could be facing some serious health consequences. That's why it's so important to have an automatic stay in place.
3. Stay Against Eviction
If you're facing eviction, the automatic stay can buy you some time. It gives you a chance to catch up on your rent payments and get back on solid footing. If your landlord tries to evict you, they can be held in contempt of court. This could result in a hefty financial penalty, which may motivate them to stop their eviction proceedings.
4. Protection Against Wage Garnishments
Wage garnishments can be a real pain. They can make it difficult to make ends meet and can put a strain on your finances. But if you have an automatic stay in place, your creditors are not allowed to garnish your wages. This can give you some much-needed relief and help you get back on your feet.
5. No Collection of Overpaid Public Benefits
If you receive public benefits, such as food stamps or Medicaid, you may be worried about having to pay them back if you file for bankruptcy. But, with an automatic stay in place, creditors are not allowed to collect on overpaid public benefits. This can give you some peace of mind and help you get back on your feet.
Bankruptcy can offer you some much-needed relief. And with an automatic stay in place, you can rest assured that your creditors will not be able to take advantage of you. It will give you much-needed relief and helps you bounce back sooner. Call a bankruptcy attorney to get relief from creditors breathing down your neck.
