When you become unable to stay on top of your finances due to sudden medical debt or other circumstances, you may feel as if you are living in a constant state of anxiety. Having creditors contact you at your California home or at work may compound these feelings. However, you may be able to obtain at least temporary relief by filing for bankruptcy.
According to LendingTree, once you file for bankruptcy, a period called the automatic stay begins. During this time, many of your creditors have to stop coming after you in their efforts to get what you owe them. While the automatic stay does not put an end to all creditor communications, it should give you temporary relief from the following.
Losing some of your earnings to wage garnishment may prove difficult and embarrassing. After you initiate bankruptcy proceedings and the automatic stay takes effect, you should start receiving the full amount of your paycheck while your bankruptcy case is ongoing.
If your water or electric company has been threatening to shut off your services, know that it may not do so during the automatic stay period.
Foreclosure or eviction
Except in very limited circumstances, bankruptcy’s automatic stay also gives you relief from the threat of foreclosure or eviction. You may encounter trouble, though, if your creditor or landlord makes a successful request to have the stay lifted.
Note that the automatic stay does not give you relief from all creditors. If you have to pay spousal or child support, for example, plan to continue to do so during the automatic stay period.