If you’re like most Americans, you may not remember the last time you actually wrote a check for something. Online payments — especially automated ones for recurring payments like your rent, car note and utilities.
So, what happens when the automatic stay goes into effect once you file bankruptcy? The automatic stay is designed to halt all collection activity from your creditors until the bankruptcy is resolved. Because of this, all automated payments you have set up through your bank should cease.
That isn’t to say, however, that the process is perfect. For one thing, some of your automated payments may still try to draw on your account. For example, your gym membership fees and your cloud storage fees may still be charged — simply because those creditors may not have the word about the stay. To avoid this particular issue, it’s smart to stop automated payments to all your accounts before you actually file bankruptcy.
Another problem is that you may still want to make some of those regular payments. If you intend to continue living where you are, for example, you don’t want to get behind on your rent. The good news is that you can still pay the bill — but you need to find another way to do it. (Your landlord is temporarily barred from harassing you for the rent, but they can still take it when offered.) Just make certain that you get the appropriate receipts and don’t pay in cash.
Understanding all of your options during bankruptcy can be difficult. Find an experienced advocate to help.