When people are facing bankruptcy they are often stressed out about losing their home or car. On top of that, they often can not get a moment of peace with collection companies calling constantly. If this sounds familiar, the protections offered by the automatic stay will interest you.
If you file for bankruptcy in Minnesota, the automatic stay is a powerful legal tool that can help you in several ways. Here’s how it works:
- Stops creditor collection activities: The automatic stay stops most collection activities against you, including phone calls, letters, and lawsuits. Creditors are legally required to stop trying to collect on your debts as soon as you file for bankruptcy.
- Prevents foreclosures and repossessions: The automatic stay can also stop foreclosure proceedings against your home or repossession of your vehicle, giving you time to catch up on missed payments or make other arrangements.
- Halts wage garnishments: If a creditor has obtained a wage garnishment order against you, the automatic stay will stop the garnishment, giving you some financial relief.
- Pauses utility disconnections: If you are behind on utility bills, the automatic stay can temporarily stop disconnection of your service, giving you time to catch up on payments or make other arrangements.
Overall, the automatic stay is designed to provide you with immediate relief from creditor actions while you work on a more long-term solution to your debt problems. It is an important part of the bankruptcy process and can help you regain control of your finances.