Hundreds of thousands of people look for protection in bankruptcy every year, and that help can begin as soon as you file. When you’re in dire need of shelter, you may be able to ask for those same advantages – but there are some exceptions.
Issues like overextension, reduced income and surprise expenses led over 700,000 people to file for bankruptcy in the last three years of reporting, according to the American Bankruptcy Institute. If you’re looking to join the ranks of people that have found asylum through bankruptcy, you’re probably especially interested in the automatic stay, which limits collections while you begin the process. But despite the name, the automatic stay isn’t always going to cover every problem.
There are times when a stay can run up against limitations:
- Utilities: If the utility company says they’re going to shut off your water or power, an automatic stay could step in and shelter you. While this temporary relief can help, these companies may require you to give a sizeable deposit when the process is over to make sure you can pay up when the bills come around again.
- Housing: If you’re looking at an eviction, that stay might just be buying you time. There’s not much a stay can do if your landlord has already started the eviction process, or the landlord can request that the courts lift the stay to allow the process to move ahead.
- Timeline: Repeat filings could begin to limit the protections. There’s generally not a specific time frame spelled out for excessive applications, but frequent trips to the well could cause a court to reign in the length of the stay or deny it outright.
Bankruptcy can offer a great deal of help, in no small part to the power of the automatic stay. But there are limits to its authority, so make sure you know how it might apply to your particular case.