Nobody likes to get phone calls from collection agencies. Despite laws intended to protect consumers from harassment, most collection agencies make you very uncomfortable when they're trying to get the money from you and will call you several times a day. If you have gotten to this point with your financial situation, it's no wonder you're considering filing bankruptcy for some relief!

Sometimes, people find themselves in such a bad financial situation that they're at risk of eviction from their apartment or foreclosing on their homes, having utilities cut off for lack of payment, or getting served with a lawsuit by a creditor who is looking for their money and tired of waiting. If there is no equity in the home to pull out and pay off the debt that has gotten out of control, many people turn to bankruptcy to alleviate the financial stress.

When you file for a bankruptcy, a magical process called “the automatic stay” occurs immediately. An automatic stay stops creditors from calling, and can even put an end (at least temporarily) to many other stressful issues related to not being able to pay your bills, also. Any lawsuits filed against you must be put to a stop, immediately. It can also provide assistance and prevention of various other common emergencies (and why many people decide to move forward and file for bankruptcy).

The automatic stay is a protection provided by the Bankruptcy courts, and it is designed to give consumers some more breathing room while they work to get their finances straightened out, or at least to get them more manageable. It doesn't matter whether the consumer is applying for a Chapter 7 or a Chapter 13 bankruptcy, the Automatic Stay protects them from creditor harassment and other stressors during this time period.

Disconnections from Utilities: Sometimes when you fall far enough behind on various utility bills, you might get threats to have your water, electric, telephone or gas shut off. When you file for bankruptcy, the automatic stay will ensure that the disconnection is at least prevented for 20 days. When the bankruptcy goes through, most utility debts will be discharged completely.

Eviction: If you have been unable to pay your rent and your landlord is threatening to evict you, the automatic stay may help you stay in your apartment. Keep in mind, recent changes to the bankruptcy law make it easier for landlords to evict non-payers of the rent, even if there is an automatic stay. If your landlord had already created a judgment of possession against you prior to the filing of the bankruptcy, than he or she is entitled to proceed with evictions. You also may not be protected under the automatic stay if you have damaged the landlord's property.

Foreclosure: If you have been missing your mortgage payments, after awhile, the house will get foreclosed on. An automatic stay from the filing of bankruptcy will temporarily stop the foreclosure proceedings. If you are in danger of foreclosing on your home, it's probably better to go with a Chapter 13 bankruptcy than a Chapter 7, because it will help you keep your home where as a Chapter 7 will require you sell the home back to the bank, in most instances.