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By the time a person decides to file for bankruptcy, he or she has probably exhausted all other options for dealing with the debt. Some people put off filing for bankruptcy simply because they don't think that the process will actually help them.
One way that bankruptcy can help you deal with the debt you have is by taking away some of the stress of dealing with the debt collectors. You know how stressful it is to have constant phone calls and letters that are demanding money from you that you just don't have to send in.
When you file for bankruptcy, the court issues an automatic stay. The automatic stay means that debt collectors can't contact you in an effort to collect a debt. They can't send you any letters demanding payments, and they can't harass you over the phone.
There are some limits to the automatic stay that you must consider. One of these is that utility companies must stop disconnection procedures, but only temporarily. It can temporarily stop eviction proceedings. It can also stop wage garnishments, but only until the automatic stay is lifted. Once the automatic stay is lifted, debt collectors for some debts might be able to commence collection attempts, as long as the debt wasn't included in the bankruptcy.
While you shouldn't file for bankruptcy based solely on the automatic stay, it can be a huge benefit if you are planning on filing anyway. Make sure that if you are using it to stop a certain collection that you find out if it will and how long it will stop the collection attempts. Letting your attorney know about your concerns is one way that you can find out the options that you have.
Source: FindLaw, "The Automatic Stay: Stopping Creditors with Bankruptcy," accessed May 19, 2017