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3 ways the automatic stay can give you breathing room

When you’re behind on your bills, the last thing you need is constant reminders from creditors and bill collectors. Creditor harassment can make a dire situation feel hopeless. Fortunately, filing for bankruptcy protection will institute an “automatic stay.” An automatic stay puts an immediate stop to collection activities. Here are three ways the automatic stay can help provide you with the breathing room you need while you figure out your debt relief options.

Prevent utility shutoffs

You shouldn’t have to live with the constant worry that a utility company will shut off your water, gas or electric service. The automatic stay will stop power companies from taking this type of drastic action. Bear in mind that the stay is only temporary. However, it can provide you with the time you need to come up with a plan to address past due utility bills.

Putting a halt to foreclosure proceedings

If your lender is threatening you with foreclosure, the automatic stay will put a temporary halt to these actions. It will also temporarily stop proceedings that are already in progress. This can give you the valuable time you need to catch up on your payments. If that’s not possible, it may give you time to work out a loan modification with your lender.

If neither are possible, you can expect that your mortgage holder will go forward with the foreclosure once the stay has expired. However, this can provide you with the time you need to figure out a living situation moving forward.

Getting paid in full

Few things are more frustrating than having creditors garnish your wages. When you’re not receiving a full paycheck, it can be impossible to catch up on your debt. All wage garnishment actions will cease during the course of the automatic stay. Receiving your full wages can be an absolute relief.

Remember, the automatic stay is only temporary

The automatic stay is probably not the full-blown remedy you need when you’re struggling with debt. In fact, creditors can and do get around the automatic stay by requesting a court order. That said, the time it buys you can be invaluable as you come up with a more permanent debt relief plan.