Many New Jersey residents facing increasingly overwhelming debt decide to file for bankruptcy because they grow tired of having creditors harass them at home, at work or both. Creditor harassment may well prove anxiety-inducing, but once you formally file for bankruptcy, something called the “automatic stay” kicks into play.
Per LendingTree, the automatic stay is something that prevents many of your creditors from contacting you and trying to collect what you owe them while you work through the details of your bankruptcy filing. While the automatic stay does not absolve you from having to pay all debts for a period, it does offer protection from the following.
Foreclosures and evictions
If you have concerns about your landlord evicting you or a creditor foreclosing on your home, know that they typically may not do so once the automatic stay period kicks in. However, there may be rare exceptions. For example, if your landlord secured an eviction judgment before the automatic stay kicked in, it is typically within his or her rights to kick you out.
If you are losing a portion of your wages to garnishment, this also ceases once the automatic stay kicks in. Once you formally initiate bankruptcy proceedings, your employer may no longer take some of your paychecks to pay your creditors while the automatic stay remains in effect.
If you are facing the threat of having your electricity or water turned off, know that your utility companies may not stop your service during bankruptcy’s automatic stay.
Please note that if you have child support or alimony arrangements in place, the automatic stay does not impact these obligations.