An automatic stay is a court order that stops civil lawsuits against you. It also prevents any collection actions against your property from being taken by creditors, collection agencies, or government entities.
What the Automated Stay Can Prevent (at least Temporarily)
Here are some examples of how the automatic stay impacts common emergencies:
- Utility disconnections. If a company threatens to disconnect your water or electric service, the automatic stay will stop the disconnection for at least twenty days. Even though a utility bill is not enough to justify filing bankruptcy, you might consider it if there are other debts that you can discharge.
- The automatic stay will block proceedings if your home is being foreclosed upon. The bankruptcy chapter you file will determine what happens next. Chapter 13 bankruptcy can be a better option if you wish to keep your home.
- The automatic stay may be able to help you if your landlord has a judgment of possession against you when you file. However, it is usually temporary. The automatic stay will not affect eviction proceedings if your landlord has already filed a judgment against you.
- Collection of public benefits overpayments. The agency has the right to take the money out of future checks or from you if you are no longer receiving benefits. This collection is prevented by the automatic stay. The automatic stay does not prevent the agency from depriving you of benefits if that happens.
- Multiple garnishments on wages. Filing bankruptcy stops most garnishments from happening. You will not only be able to take home your full salary but you will also be able to discharge any qualifying debts, such as credit card balances or personal loans, through bankruptcy. Commonly garnished debts such as those for child support or alimony will not be discharged.
This article was written by Alla Tenina. Alla is one of the best bankruptcy attorneys in Los Angeles California, and the founder of Tenina Law. She has experience in bankruptcies, real estate planning, and complex tax matters. The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.