Often, when people are having significant debt problems, they fall behind on their credit cards, auto loans, and sometimes their rent or mortgage. Debtors may also be late on their cellphone bill, their utility bills, and other debts, such as medical debts.

As a general rule, when debtors fall behind on their monthly obligations, they will not have any peace. They will receive collection letters in the mail and debt collectors will be calling them on a daily basis.

When a debtor owes money to several different creditors, the debtor can receive numerous calls a day from collectors, which only adds stress to an already stressful situation. However, when such debtors file Chapter 7 or 13 bankruptcy, they can experience immediate relief from the "automatic stay," which goes into effect as soon as the debtor files for bankruptcy.

What is the automatic stay?

When debtors file Chapter 7 or Chapter 13 bankruptcy, the automatic stay takes effect immediately. The automatic stay prohibits creditors and debt collectors from continuing or starting any collection activity against the debtor, which provides debtors with the peace and quiet they need to regain their financial footing.

Here are some ways that the automatic stay helps debtors, especially in emergencies:

• If a utility company is threatening to disconnect a debtor's gas, electric, or water, the automatic stay can prevent the disconnection for 20 days, if not more.
• If the debtor is in foreclosure, the automatic stay can temporarily halt the proceedings, but the lender can probably foreclose on the property eventually. If your home is threatened by foreclosure, you are probably better off filing a Chapter 13 bankruptcy if you want to keep your home.
• If you are subject to wage garnishments, the automatic stay can stop wage garnishments dead in their tracks.

If you are being harassed by creditors, contact a bankruptcy attorney to discuss filing a Chapter 7 or Chapter 13 and to learn what types of relief are available under the automatic stay.