As a New Jersey resident who has watched your debt spiral out of control, you may be feeling the pressure from your creditors as they attempt to collect what you owe them. Often, this seemingly constant barrage of phone calls can prove immensely stressful, but you may be able to put a stop to the communications by filing for bankruptcy. How?
According to LendingTree, once you begin bankruptcy proceedings, an automatic stay takes effect, and during this time, most of your creditors may no longer legally contact you in an attempt to collect on your debts. While the automatic stay period does not last forever (in most Chapter 7 bankruptcy cases, it last somewhere between 90 and 120 days) it can provide you with a period of relief while you work through your bankruptcy case and attempt to get a better handle on your finances.
So, what, exactly, can the automatic stay in bankruptcy protect you against? For starters, it can help you keep the lights on. If, for example, your utility company is threatening to disconnect your service, that company may not do so while the automatic stay period is in effect. Similarly, if you are losing a percentage of your salary to wage garnishment due to outstanding debts, the garnishment stops during the automatic stay period.
If you have concerns about losing your home or rental property, you may find at least temporary relief through bankruptcy’s automatic stay. The stay automatically halts the foreclosure process, and if you are a renter and your landlord has not yet received an eviction judgment against you, the automatic stay can help buy you some time.
This information about bankruptcy’s automatic stay is educational in nature and is not a substitute for legal advice.