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How does an automatic stay help in bankruptcy?

On Behalf of | Aug 16, 2021 | Bankruptcy |

A person’s financial situation can affect almost every area of his or her life. To some individuals who have not experienced serious money issues, the idea of struggling financially may mean not being able to buy things that they want. Unfortunately, for many who are feeling crushed by substantial debt, money issues can mean not being able to meet their basic needs and facing serious risks to their well-being. However, bankruptcy may be able to help qualifying Michigan residents by enacting an automatic stay that goes into effect almost immediately after filing. 

An automatic stay does not get rid of a person’s outstanding debts, but it does put many actions taken by creditors on hold. Some serious issues that the stay could delay at least temporarily include the following: 

  • Disconnection of utilities 
  • Eviction, under certain circumstances 
  • Wage garnishment 
  • Foreclosure 

This help could lift a great amount of stress from the individual’s shoulders and allow time to get financial affairs in order through bankruptcy without the continual creditor calls. Of course, an automatic stay does not mean that these issues go away, and it is possible for certain creditors to petition the court to have the stay lifted. In many cases, however, individuals pursuing bankruptcy get time to put their cases in motion. 

Though bankruptcy is not the right option for all Michigan residents, it could help struggling individuals who qualify get their affairs back on track. It can be difficult to know which type of debt relief could suit a person’s particular circumstances, so gaining reliable information is wise. Additionally, if parties are worried about figuring out this process, they may want to remember that they could seek assistance from experienced legal professionals. 

 

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