Bankruptcy is often vilified as the final nail in a person’s financial coffin rather than the breath of fresh air that it truly is. By the time a person in Florida files for bankruptcy, he or she are usually behind on one more debts and is dealing with other serious issues, such as harassing creditors or even foreclosure. One of the most pleasant surprises people get from filing Chapter 7 bankruptcy is the automatic stay that stops many of these issues in their tracks.
The automatic stay kicks in after filing for bankruptcy and protects filers from collection agencies, creditors, government entities, utility companies and others who are trying to extract money from that individual. This can be an essential lifeline for those who are struggling to maintain a safe and comfortable roof over their heads. An automatic stay can potentially prevent a utility company from turning off services for a period of approximately 20 days and temporarily halt foreclosure proceedings. In some cases, it can also stall eviction proceedings. There are exceptions and specialized instances for these types of situations, so understanding when an automatic stay will work — and when it may not — is important.
Wage garnishment tends to kick people who are already low even lower. In many cases it makes it harder than ever for these individuals to catch up on their bills and debts. An automatic stay stops all wage garnishments — even those who have multiple garnishments — until the stay is later lifted or the underlying debt discharged. If wage garnishments are eating up all of a person’s income, bankruptcy can help.
While the automatic stay cannot stop every financial problem, it is extremely effective for some of the most common issues that some Florida consumers face. Aside from the obvious financial implications, the automatic stay can also provide a tremendous amount of emotional relief. Those on the fence regarding filing for Chapter 7 bankruptcy should consider whether an automatic stay could help them reach their financial goals for the future.