Bankruptcy is a daunting word, especially for those who are facing acute financial problems. Filing for bankruptcy does not come easy for people. However, it is surprising that many people are unaware of the fact that a number of options are available for people that can help you during this process. The automatic stay is one of the biggest arsenals in the kitty for people who file for bankruptcy. However, not much is known about this tool. The automatic stay is a part of all bankruptcy cases and helps stop all creditors and debt collection agencies from taking any collection actions against you.
For a person already reeling under financial stress and the legalities of filing for bankruptcy, dealing with collection agencies and creditors is the last straw. Many people feel cornered due to this multiple prong attack. But automatic stay can protect you and your family from various problems while facing severe financial crisis. Any problems in making child support payments, losing benefits or other utilities; or if you are facing eviction, repossession or foreclosure issues, etc. you can get a respite through an automatic stay.
Different Ways through Which Automatic Stay Law Can Help When Filing For Bankruptcy
Though filing for bankruptcy has long term benefits for people who wish to wipe their financial slate clean, immediate benefits can be seen through the automatic stay law. As per lawyers of Los Angeles based law firm, Recovery Law Group there are various ways a person filing for bankruptcy can benefit through it. These include:
- Prevent Disconnections of Utilities. Connections for utilities like water, gas, and electricity can be disconnected due to non-payment of bills. However, with an automatic stay in place, the disconnection is postponed by a minimum of 20 days, allowing you time to clear the dues.
- Stop Foreclosure. The most common proceedings for your home mortgage is However, if a person choosing to file for bankruptcy under chapter 13 wishes to keep their home during the bankruptcy proceedings, the automatic stay will postpone the foreclosure proceedings.
- Stay on Eviction. With an automatic stay in place, property owners cannot evict tenants anytime soon. Though with an automatic stay in place, you and your family are protected from eviction for a few days, months or weeks; but the property owners can find loopholes in the law to get you evicted. It is recommended to consult bankruptcy lawyers to provide a more permanent solution to the existing problem.
- Might be Able to Stop Collection of Public Benefits Overpayments. In case you receive overpayments for public benefits, during bankruptcy proceedings, an agency would be allowed to collect these overpayments from your cheques. However, with automatic stay law in place, these collections can be prevented offering some respite to you.
- May be Able to Prevent Salary Garnishments. When a person files for bankruptcy, the automatic stay law prohibits any collection agency to take any part of your salary, except for payments which may be taken to satisfy court judgments.
Bankruptcy may not always be a tough process, sometimes it is the silver lining which allows a person to get out of a bad situation. Consulting with a good bankruptcy lawyer can make a huge amount of difference to not just your case but also your outlook towards your finances. Skilled lawyers can help use tools like automatic stay for the benefit of you and your family so that they do not have to undergo hard times unnecessarily.