One of the benefits that people who file for bankruptcy look forward to is the automatic stay. There is almost nothing as stressful as a creditor coming to you to find out when you are going to pay a bill. They might get pushy and start demanding that you send in money -- even though you can't give them something that you don't have!
When you file for bankruptcy, the court issues an automatic stay. This means that the creditors aren't able to contact you to collect the debt. Once this is issued, you can answer your phone and check your mail without having to worry that an unscrupulous individual is going to harass you over a payment you already told them you couldn't pay.
The automatic stay also has some other important benefits, but these are only temporary so remember to use them only as a way to make it toward your final plans regarding the situation.
- Stop eviction: This will only occur if there isn't already a judgment in the eviction case. You will only have a limited period of relief because the court will likely side with the landlord regarding your tenancy.
- Stop utility disconnection. This is another one that is a means to an end. Typically, you will have at least 20 days to pay the balance before the utility company can disconnect the service.
- Stop wage garnishment. Any garnishment that you have coming out of your check would stop once the automatic stay is placed. When the stay is lifted, those garnishments can continue as scheduled.
There might also be other benefits that you can enjoy, such as delaying foreclosure proceedings. Be sure to consider these carefully when you are trying to determine whether you need to file for bankruptcy or not.