Quick Relief: What to Know About Automatic Stays

It's not just the overwhelming accumulation of debt that sends filers rushing to file for chapter 7 bankruptcy: the threat of losing property, harassment by bill collectors, and lack of a place to live can also figure heavily in that decision. A bankruptcy filing provides a unique method of putting an immediate stop to certain activities, which lends quick relief and peace. You should know however, that the relief of a bankruptcy filing, which employs something called the automatic stop, doesn't extend to every single debt or issue. Read on to learn more about automatic stops and the powers they have and don't have.

You can count on the automatic stay to:

1. Stop nearly all garnishment activities. Garnishment is when a legal method of removing money from your wages is used to pay off a debt. An automatic stay will put an end to the garnishment, but it won't necessarily do away with the debt that you owe. Being able to take home your full paycheck will bring you more income to deal with bills that you may not be able to get discharged with bankruptcy, such as secured debt.

2. Stop foreclosure measures, at least temporarily. Often, filers are allowed to keep their primary residence after a bankruptcy filing, depending on how much equity they have in it. If you are behind on your payments, however, you must get caught up since the automatic stay is not meant to allow you to cease making payments and stay in your home indefinitely. At best, you may be able to funnel some extra funds that were previously going to credit-card debt toward getting caught up on the mortgage or use the time to find alternate living arrangements.

3. Delay utility disconnections. With an automatic stay you can get a 20-day reprieve from the scary possibility of your electricity, water, gas, and telephone (land-line only) getting turned off.

4. Stop almost all bill-collection activities. You are likely very weary of the constant phone calls and threatening letters from your credit-card creditors. The good news is that once you file for your chapter 7 bankruptcy in federal court, the creditors must cease that activity immediately. Any accidental communications from those creditors should prompt you to provide them with the case number and your attorney's contact information. As a bonus, since most all credit-card debt is unsecured, you can cease making those large minimum payments and use the money for other obligations.

The automatic stay may not help you if:

1. You owe money for child support. The best interest of the child edict demands that obligations to your minor child must continue unabated and that any associated wage-garnishment activity must continue. Additionally, in some states you must continue to honor any spousal support orders.

2. You owe money for taxes. The IRS cannot place a lien on your property once you file, but you must continue to comply with any installment agreements that were already in place.

3. You owe money to the courts (fees and fines) as a result of being found guilty of criminal acts.

To learn more about the automatic stay, speak with a bankruptcy attorney such as Stuart R Whitehair Attorney.