Personal bankruptcy options provide a variety of important protections to filing parties. One of the most valuable protections is the automatic stay which is why those considering bankruptcy should understand the ways the automatic stay may be able to protect and help them.
Once the filing party has filed for personal bankruptcy protection the automatic stay goes into effect. The automatic stay prevents creditor collection actions while the bankruptcy process progresses. This can allow the filing party some immediate relief and breathing room as they deal with the daily strain of too many bills and overwhelming debt.
In addition to general relief from creditors during the bankruptcy process, the automatic stay can help stop:
- Foreclosure proceedings – the automatic stay can help stop foreclosure proceedings but not likely permanently so it is important that the filing party understands the details as they work to save their home from the foreclosure process.
- Utility disconnections – the automatic stay can help stop utility disconnections during the bankruptcy process.
- Evictions – the automatic stay can help stop the eviction process during the bankruptcy process.
- Wage garnishments – the automatic stay can help stop wage garnishments during the bankruptcy process.
The automatic stay does not help with every debt collection proceeding so it is important for the filing party to understand what it helps with and what it does not help with. The automatic stay is an important protection during bankruptcy and also applies in business bankruptcy situations.
The personal bankruptcy process is designed to help struggling consumers and homeowners enjoy debt relief and provides different options and protections to help them accomplish a fresh financial start and address their needs and concerns. The automatic stay is an additional protection that is a built-in part of the process they should also ensure they understand the benefits of.