The automatic stay can do many things for bankruptcy filers that they should be familiar with. The protections associated with the automatic stay kick in once the filing party has filed for any type of personal bankruptcy protection and are essential protections to be familiar with.

In general, the automatic stay stops any creditor collection action from proceeding during the bankruptcy process. It goes into place automatically one bankruptcy protection has been filed for.

How it works

Following are some of the concerns that the automatic stay can help with:

  • Foreclosure: The automatic stay can stop the foreclosure process while different bankruptcy options may be able to provide more long-term relief and is something struggling homeowners may want to explore.
  • Eviction: In some circumstances, the automatic stay may be able to provide some relief for eviction proceedings which struggling consumers should be familiar with.
  • Utilities: The automatic stay may be able to prevent utilities from being shut off for a period of at least 20 days.
  • Wage garnishment: The automatic stay may be able to stop wage garnishment which can be of particular concern to struggling consumers trying to pay their bills.
  • Stopping the recovery of public benefits overpayments: Any public benefits paid to the struggling consumer that were overpaid will not be taken back while the automatic stay is in place.

There are different types of personal bankruptcy protections that can help struggling consumers in different situations. All come with certain protections including the automatic stay. Struggling consumers considering filing for bankruptcy should be familiar with the different personal bankruptcy protections and the variety of ways they may be able to help them.