Once your financial affairs start spiraling out of control in New Jersey, you may find yourself falling into a deeper and deeper hole. If you do not see a realistic way to dig yourself out of debt and get things back on track within the next several years, it may be time to consider bankruptcy.
Per LendingTree, once you formally start consumer bankruptcy proceedings, something called the “automatic stay” kicks in. During the automatic stay period, certain creditors may no longer contact you while you work your way through your bankruptcy case. More specifically, bankruptcy’s automatic stay period offers relief from the following.
If your debts have caused you to lose some of your work earnings to wage garnishment, know that bankruptcy’s automatic stay puts a temporary halt to your employer having to withhold a percentage of your earnings.
Foreclosures and evictions
Depending on circumstances, filing for bankruptcy and initiating the automatic stay period may also help you guard against foreclosure or eviction. However, if you have a mortgage and do not stay atop your payments during the stay period, your creditor has the option of trying to have the stay lifted to foreclose against you.
Bankruptcy’s automatic stay also prevents your utility providers from disconnecting your services for nonpayment. However, bankruptcy courts may allow your utility creditors to take a deposit from you in this scenario.
While this is a brief overview of some of the temporary protections that you have during bankruptcy’s automatic stay period, it is not a full summary of all such protections.