Many Massachusetts residents struggle to stay atop of their finances and bills. If you count yourself among them, you may be thinking about filing for bankruptcy. If you are doing so because you have become tired of fielding constant calls and communications from creditors looking to collect money from you, you may find some relief through bankruptcy’s automatic stay.
What is the automatic stay, and how might it give you at least temporary relief from creditor calls? According to LendingTree, bankruptcy’s automatic stay takes effect as soon as you initiate formal bankruptcy proceedings. In brief, the automatic stay is a stretch of time in which your creditors must stop coming after you. What sorts of protections does bankruptcy’s automatic stay offer?
Protection against wage garnishment
Losing a large part of your earnings to wage garnishment may make it even harder to stay on top of your finances. However, once the automatic stay period begins, your employer must stop withholding any portion of your paycheck until your case closes.
Protection against utility disconnections
Having your electricity or water companies threaten to disconnect your services may be cause for concern. However, utility companies may not disconnect your services while the automatic stay remains in effect.
Protection from credit card company harassment
If you have significant credit card debt, you may be fielding seemingly constant communications from your credit card company. Filing for bankruptcy and initiating the automatic stay period stops these credit card company calls.
Protection from foreclosure and eviction
In most cases, bankruptcy’s automatic stay also prevents your landlord from evicting you or your bank from foreclosing on your home. Keep in mind, though, that several exceptions exist.