If you’re facing serious debt, a bankruptcy attorney can offer you a way out. But did you know that bankruptcy proceedings can also halt some of the immediate effects of a financial crisis? If you’re facing eviction, wage garnishment, and the loss of utilities, the automatic stay placed on bankruptcy cases can be just as important as the long-term debt relief.

What Is an Automatic Stay?

As soon as you file for bankruptcy, the court steps in to offer you protection from your creditors. The automatic stay puts any lawsuits filed against you on pause while your financial matters are sorted out and also ensures that certain entities like utility companies can’t deny you service. Specifically, an automatic stay does the following:

• Keeps Your Utilities On: This applies to phone, gas, electric, and water services. This can be especially important during the winter if you don’t have other housing options.
• Stops Foreclosure Proceedings: Depending on the type of bankruptcy you file for, this may be a temporary benefit or may help you keep your house in the long run.
• Stops Evictions: In most cases, a bankruptcy attorney filing on your behalf can buy you at least a few extra days before the eviction, although the court may still side with your landlord in the end.
• Stops Wage Garnishment: If payment for various debts is coming out of your paycheck, including the repayment of government benefits, an automatic stay can halt this process.

The Limitations of an Automatic Stay

Unfortunately, an automatic stay isn’t a permanent fix, and it can’t stop every type of debt collection. If you owe child support, back taxes, or payment on loans against your pension, a stay will not halt those payments. Also, if you file for bankruptcy more than once, the automatic stay loses its power, and creditors can argue that you’ve filed in bad faith to have the stay lifted.

If you’re facing a serious housing crisis due to debt, filing for bankruptcy can cause an automatic stay on those debts, which will buy you time to seek more permanent relief. Talk to a bankruptcy attorney today to see if this is the best option for your situation.

O'Neill Law Firm, LLC in La Crosse, WI, offers experienced, client-focused legal representation in a range of cases. Whether you need a bankruptcy attorney for debt relief, a divorce lawyer to protect your assets and custody claims, or a criminal defense lawyer to represent you in court, they offer legal support through any conflict or crisis. To arrange a consultation, call (608) 519-3551 or send a message online.