When you file for bankruptcy, you qualify for a variety of different types of protection. One of the types of protection that you get when you file for personal bankruptcy is an automatic stay. This is an important component of the bankruptcy process that one needs to understand.  

The Basics of An Automatic Stay 

When you file for bankruptcy, you get an automatic stay. An automatic stay is designed to protect you from creditors as you go through the bankruptcy process. It is basically providing you with a legal break as a debtor while you go through the bankruptcy process. An automatic stay requires that creditors have to respect it or face legal consequences.  

What Stops When Your Automatic Stay Goes Into Effect 

When your automatic stay for your bankruptcy case goes into effect, there are a variety of things that the automatic stay will stop.  

If you owe money on your vehicle and have not been making payments, your vehicle cannot be repossessed. If you have used your vehicle as collateral for another loan, they still can't take your vehicle. 

If the bank has started foreclosure proceedings on your home, they cannot continue the foreclosure process on your home. If you are behind on your mortgage payments and your home is on the verge of foreclosure, the bank cannot proceed with the foreclosure over the months that it takes for your bankruptcy case to be resolved. 

During the bankruptcy process, your wages cannot be garnished. If you have been having something such as child support removed from your wages, that may continue during the bankruptcy proceedings. New garnishments cannot be placed on your wages. 

Most importantly of all, creditors have to stop calling you on all of your numbers. They cannot reach out to you personally anymore and have to work with the courts to settle your debts.  

The Goal of An Automatic Stay 

With an automatic stay, the overall goal varies based on what type of bankruptcy you filed for. With Chapter 7, it is designed to prevent the liquidation of your assets so that exempt properties can be protected from credits, and non-exempt property can be used to settle your debt. With Chapter 13 bankruptcy, it is designed to protect exempt assets and allow other assets to be liquidated.  

When you file for bankruptcy, all credit collection actions taken by creditors have to stop once the automatic stay is in place. This will allow you to work to settle your debts through the court process, and the automatic stay will help protect exempt property from creditors. Speak to a bankruptcy attorney to learn more.