Posted on: 30 October 2015Share
In spite of the common misconception that people who need to declare bankruptcy are taking advantage of bankruptcy laws to avoid being financially responsible, in reality people who declare bankruptcy are simply acting out of desperation. If you are considering a bankruptcy filing, you are likely deeply in debt, being hounded by debt collectors constantly, and in danger of losing your home, vehicle, and home utility services. The automatic stay, available immediately upon filing for bankruptcy, can bring you the relief you need by letting you keep some important human necessities and can buy you the time you need to make other arrangements. An automatic stay can be a powerful and effective tool for dealing with mounting debt, so read on to find out what it can, and cannot, do.
What can an automatic stay do?
- Wage Garnishments: With the exception of wage garnishments for back child support payments, an automatic stay will put an immediate end to all garnishment activity, providing you with more income to deal with your debt. You will still have to deal with the debts that led to the wage garnishment by including them on your bankruptcy petition, however.
- Foreclosures and Evictions: Foreclosure proceedings will come to a halt, temporarily. Depending on the value of your home and your debt, you may still lose your house; however, the automatic stay should buy you some time to make other living arrangements or even to get caught up on your mortgage payments. Eviction may be delayed temporarily, unless your landlord filed against you prior to your bankruptcy filing.
- Utilities: You can forestall your telephone, water, electricity and gas being disconnected for at least 20 days.
What can an automatic stay not do?
- If you owe child support or spousal support (alimony), you must continue paying as ordered and any wage garnishment associated with these family court issues will continue.
- If you have an installation agreement with the IRS, you must continue to make the agreed-upon payments. Additionally, any taxes owed must be paid when filing your tax returns. An automatic stay, will, however, prevent a lien from being placed on your property for taxes owed.
- Money owed for fines and fees due to criminal acts must still be paid.
While an automatic stay is not exactly a magic bullet for debt, it can help you to keep a roof over your head and, most importantly, give you some time to get caught up on the debt that cannot be discharged with bankruptcy. Your bankruptcy attorney will work to help you keep as much of your property as possible and make a fresh financial beginning. Find legal help through a firm like Morrison & Murff as soon as possible.