Some Arizona residents may consider the automatic stay that comes with filing for bankruptcy one of the biggest advantages of it. An automatic stay puts a halt to any lawsuit that has been filed by a creditor, a government agency or a collection agency against the debtor. This means the debtor has some breathing time in which they can regain their breath, and reorganize their finances without losing everything they had.
However, Arizona residents may not be sure what the automatic stay applies to. In order to take full advantage of the benefits personal bankruptcy has to offer cash strapped Arizona residents, it is important to understand the complexities of the law and know what is afforded protection.
Often, an automatic stay can prevent the utility company from shutting down utilities for at least 20 days. This includes water, gas, electric or telephone service. Even though 20 days may not seem like a lot, people restarting their financial life in the dead of winter may appreciate having their utilities kept on.
According to FindLaw, it also stops foreclosure proceedings and evictions. It is important to keep in mind that if a landlord has already obtained a wrongful possession judgment against the debtor, the automatic stay will not apply to the eviction. Depending on which bankruptcy the debtor files, the automatic stay on foreclosure proceedings will last for different amounts of time, but again, it allows the debtor some breathing space to rearrange their finances and get their budget in order.
Wage garnishment is also automatically stopped once bankruptcy is filed. Nonetheless, child support payments do not come under its purview.
Bankruptcy offers a lot of benefits for people struggling to make ends meet in Arizona, and one of those benefits is an automatic stay on many proceedings. Although this stay is not limitless, it is important for Arizona residents to know what it does or does not cover. An experienced bankruptcy attorney may be able to guide Arizona residents through the legalities of filing for bankruptcy.
Source: FindLaw.com, "The Automatic Stay: Stopping Creditors with Bankruptcy," accessed on Aug. 19, 2014
Source: FindLaw.com, "The Automatic Stay: Stopping Creditors with Bankruptcy," accessed on Aug. 19, 2014
