When filing for bankruptcy, it is vital to protect yourself from bill collectors. As soon as you file, an immediate court order called the automatic stay goes into effect. This stops most civil lawsuits and collection actions against your property by a creditor. There are certain situations where an automatic stay may be able to help, such as foreclosure or having wages garnished.
If you are late on paying your bills, and the utility companies are about to turn off your services, an automatic stay may be able to postpone this from happening. While utility bills alone may not be enough reason for you to file for bankruptcy, if you also have other debts, it may be a good option for you.
Depending on the chapter of bankruptcy you and your attorney filed, an automatic stay may stop foreclosure proceedings either permanently or temporarily. The issues that arise from this action is the creditor bringing the matter to the court to ask permission to foreclose anyway. Working with a bankruptcy attorney is paramount to help ensure you receive the best outcome.
Creditors view the situation as the moment you took out the mortgage; you put the home up as your collateral which makes the house a secured debt. As the debtor, you have the option of returning home, but if the property has no equity or you have no way to keep the property, the creditor will have the right to recover the property. Your attorney will review your case with you and attempt to negotiate in your best interest.
Eviction is a terrible situation to be in, and an automatic stay may give you some temporary relief. If your landlord has not already filed a judgment of possession against you, it may be possible that the creditor may postpone your eviction. Although this postponement typically only lasts for a few days or weeks, it may be enough time for you to make other living arrangements.
Overpayment of Public Benefits
Agencies can collect an overpayment of your public benefits from your future checks, but the automatic stay can prevent this collection. If you become ineligible, there is nothing that can be done to prevent the agency from denying your benefits.
Multiple Wage Garnishments
By filing an automatic stay, your multiple wage garnishments may stop. In this case, the checks you take home will be a full salary. However, keep in mind that child support and alimony wage garnishments will not get discharged.
Offering Relief from Debts
Here at Parker & DuFresne, we work to ensure that our clients can move forward from their current financial situations. Filing for bankruptcy is not the end of the world, and may even make your situation more comfortable to handle—thanks in part to the automatic stay. Contact us and learn how we can help represent you in your time of need.