The automatic stay during bankruptcy is important for struggling consumers and filing parties to be aware of because of how much it can help them. Personal bankruptcy protections are not only able to provide relief from debt but can also provide relief from creditors. Once the filing party has filed for personal bankruptcy protection, an automatic stay goes into effect that prevents further creditor collection actions during the bankruptcy process.
The automatic stay is an important tool to give the filing party a break from creditors because it prevents creditors, collection agencies, government entities and others from pursuing collection actions against the filing party during the bankruptcy process. Immediate relief the automatic stay can potentially provide includes when the filing party has received notice that their utilities may be cut off; the automatic stay may be able to prevent their utilities from being shut off for at least 20 days.
In addition, the automatic stay may be able to help with eviction and foreclosure proceedings. Other relief the automatic stay may be able to provide includes preventing overpayment of public benefits from being collected while the automatic stay in in place and also stopping all wage garnishments until the automatic stay has been lifted. The potential loss of housing, utilities, benefits and wages can be a giant stress for any struggling consumer trying to make ends meet and stay in their home.
The automatic stay can provide valuable breathing room to a struggling consumer overwhelmed by debt and facing concerns related to their everyday day needs. It is one of the different types of relief, including stress and debt relief, that personal bankruptcy protection may be able to provide which is why struggling consumers should be familiar with the options available to them.