People in New York who are behind on some of their most important bills may want to consider filing for bankruptcy. Once bankruptcy is filed, the debtor is automatically protected from most legal actions that could be taken against them by bill collectors and creditors. The automatic stay will also stop pending litigation or ongoing proceedings involving the debtor's unpaid bills.
Some of the unpaid bills that can be particularly important are city utility bills, mortgage payments and rent. When an automatic stay kicks in after a person files for bankruptcy, the filer cannot be sued by a creditor or foreclosed on. If the debtor is being evicted from a rented home, the automatic stay may allow them to stay in the home longer. An automatic stay will also stall a utilities company that is seeking to shut off a person's access to electric, gas, water or telephone services.
There are some legal proceedings that an automatic stay cannot prevent or help to stall. If a debtor is facing a lawsuit over unpaid child support, the automatic stay won't stop the lawsuit from going forward. The automatic stay will not prevent criminal proceedings from going forward, though it will stop the collection of payments ordered by a judge in a criminal proceeding.
People who are considering filing for bankruptcy so that they can get a fresh start in their financial life may want to talk to an attorney who has experience in these matters. An attorney may be able to help a debtor to understand how the automatic stay will work. The attorney can also outline the eligibility requirements for chapter 7 bankruptcy.