This blog recently discussed some of the benefits of an automatic stay in bankruptcy. The automatic stay is an important part of any bankruptcy filing to understand because it prevents creditor collection actions during the bankruptcy process and can help protect the filing party and provide a little breathing room for the filing party facing overwhelming debt.
Taking a look at some of the specific types of relief the automatic stay can provide is also an important part of understanding the personal bankruptcy process. When filing for personal bankruptcy, either a Chapter 7 or Chapter 13 bankruptcy carries with it an automatic stay. The automatic stay can help with paramount concerns such as the foreclosure process which it can stop in some circumstances. It can also stop an eviction proceedings or utilities collection payments.
Additionally, it can also help stop wage garnishment until the temporary stay is lifted. This can be helpful as many individuals struggling with debt are searching for a way to get caught up and having their wages garnished at the same time can create an untenable situation for the struggling individual. It is important to note that the automatic stay does not apply to all debts and circumstances and for the filing party to thoroughly understand the automatic stay process.
There are a variety of complexities associated with the bankruptcy process but it is designed to help individuals struggling with debt and the challenges associated with it. Having trained guidance to understand the best option and the process, including the automatic stay, can help individuals seeking a fresh financial start determine the best option for their situation.