You weren't out of work very long before you started feeling the financial crunch. The bills have piled up quickly, the utilities are long-past due, the credit card companies keep calling, and now you're worried that you're just a step or two away from foreclosure or eviction.

What can you do? It may be time to look at filing for Chapter 7 bankruptcy protection. 

While the ultimate goal of filing bankruptcy is to obtain relief from your debts and get a fresh financial start, there's an almost immediate benefit to filing your petition: It's called the "automatic stay."

What's the Automatic Stay in a Bankruptcy Petition?

The automatic stay is a federal injunction that goes into effect the moment that your bankruptcy petition is filed with the court. Its purpose is two-fold:

1. It puts all your creditors on an even playing field when it comes to collecting on your debts. That prevents an aggressive creditor from jumping ahead and trying to grab more than their fair share of whatever assets you do have and leaving the others empty-handed.
2. It gives you a much-needed break from collection efforts against your income or property. That can allow you more time to decide what steps you need to take next to protect your interests.

Once the automatic stay is in effect, it's illegal for creditors to even try to collect what you owe.

What All Can the Automatic Stay Do to Help You?

The first thing that you may notice is that all the phone calls and letters from the credit cards and debt collectors will cease. If anyone does reach you, you merely have to give them your bankruptcy lawyer's contact information and refer them that direction. Once a creditor is notified, they can no longer bother you.

In addition, the automatic stay will generally:

• Halt eviction proceedings (as long as your landlord hasn't already received a court order allowing the eviction and you're not misusing the property).
• Halt foreclosure proceedings (as long as the foreclosure isn't complete).
• Stave off disconnection of your utilities for at least a minimum period of time.
• Stop the repossession of assets like your car, boat, motorcycle, or household items.
• Freeze any lawsuits against you from your creditors, including actions to attach property liens.
• Stop wage garnishments that are designed to repay your creditors.

If you're facing an uncertain future because of financial problems, it's best to be proactive. Talk with a bankruptcy lawyer about how to get started.