If you are facing an overwhelming amount of debt, you could be receiving constant calls from collection agents and creditors. You may feel like you are in an impossible situation and that there is no way to climb out of the debt hole that seems to be swallowing your life. However, there are options. Filing for bankruptcy may be the best course of action you can take to get your debt under control.
Bankruptcy comes with many benefits, including debt restructure that makes keeping up with monthly payments much easier. Another benefit is an automatic stay that applies to anyone attempting to collect a debt from you. To find out what an automatic stay can and cannot do for you, read below.
It will keep the lights on
If you are behind on your utility bills and you have received cancellation of service notices, an automatic stay can get you at least 20 more days of electricity, telephone, gas or water. While this is not a permanent solution to keeping the lights on, it can buy you some time to get caught up with your utility bills.
Halt a foreclosure or eviction
If you own a home in Rochester and you are under threat of foreclosure, an automatic stay can stop it. Keep in mind that once the automatic stay expires, the bank can continue with the foreclosure process. Filing Chapter 13 bankruptcy instead of Chapter 7 will help you keep your home beyond the automatic stay.
If you are renting, you might also be able to halt an eviction. Unfortunately, if a court has already issued a judgment against you for wrongful possession, then your landlord can still evict you. Also, the automatic stay may only provide you with a few extra days or weeks.
Stop wage garnishment
If you are subject to wage garnishments, such as for student loan payments, an automatic stay will stop them. Once the automatic stay runs out, you could be subject to garnishments again unless bankruptcy proceedings provide you with this protection.
Things an automatic stay can't do
There are some things that an automatic stay cannot do. For example, if the Internal Revenue Service (IRS) plans to audit you or claim non-payment of taxes against you, then an automatic stay cannot prevent it. However, it will keep the IRS from taking any of your income or property. Also, an automatic stay will not stop a lawsuit for child support or to establish paternity.
If you have out-of-control debt, bankruptcy might be the best option. Chapter 7 or Chapter 13 bankruptcy can provide you with the relief you need to get your finances in order.