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Bankruptcy’s automatic stay means protection from creditors

On Behalf of | Apr 21, 2023 | chapter 7 bankruptcy |

Once you fall behind on your bills in Maryland, it becomes increasingly difficult to catch back up. In addition to the bills you are already struggling to pay, you may now face fines and fees for late payments that increase your debt load even more. The deeper your debt becomes, the more likely you are to experience harassment at the hands of your creditors. However, filing for bankruptcy may grant you temporary protection in this area.

According to LendingTree, the automatic stay is something that kicks in once you formally launch personal bankruptcy proceedings. Once the automatic stay comes into play, it typically remains in place until you close your bankruptcy case, although there are a few limited exceptions. The automatic stay grants you protection from having to pay some types of expenses, but not others. More specifically, the automatic stay grants you temporary protection from the following.

Utility companies

Having your electricity or water provider threaten to disconnect your services is stressful and anxiety-inducing. Yet, utility companies may not shut off your services while you are working your way through a bankruptcy case and the automatic stay in place.

Wage garnishments

If one or more of your creditors are taking some of your paychecks through wage garnishment, this has to stop once the automatic stay takes effect.

Foreclosures and evictions

If your landlord or loan provider is threatening to evict you or foreclose on your home, he or she may not do so while the automatic stay remains in effect.

While bankruptcy’s automatic stay means protection from many creditors, it does not absolve you from having to pay alimony or child support.

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