One of the immediate benefits of filing for bankruptcy is receiving protection from the bill collectors and creditors who may be hounding you.
The automatic stay is responsible for this kind of protection. You will find it works for you in several instances.
Ending wage garnishment
When you file for bankruptcy protection, you activate the automatic stay. This will stop any and all wage garnishment trouble until the stay is lifted.
If your lender wants to foreclose on your home due to late mortgage payments, you can relax. The automatic stay stops the foreclosure process immediately. Keep in mind that the lender may find a way to continue foreclosure once the stay is lifted.
If you are behind in payments, you may find yourself facing disconnection from certain service providers. The automatic stay will prevent the phone, gas, water or electric company from turning off your service for a minimum of 20 days.
Delaying an eviction
If your landlord is trying to evict you, an automatic stay will also put a temporary stop to the process. This may only last for a few days or weeks depending on the circumstances. However, the landlord will likely succeed if he or she goes to court and asks permission to evict you as long as the court finds there is good reason to do so.
Limitations to consider
Although the automatic stay can be helpful, it cannot do everything. It cannot prevent the IRS from auditing you or requiring that you file an income tax return. The stay will not stop legal proceedings if you are late on child support payments. Also, if you are facing criminal proceedings that also involve payment of a debt, the automatic stay will only put a halt to the debt portion.