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Are you swimming in a sea of unpaid bills and repossession notices? If so, the automatic stay that comes along with filing for bankruptcy can give you the breathing room you need to sort out your finances. Here is a closer look at how this stay can help you and your family from the minute you declare bankruptcy:

Buying You Time
According to federal law, the filing of bankruptcy triggers an automatic stay on your debts. This is similar to pressing the pause button on your mortgage, loans, and collection actions. After your paperwork is processed at the courthouse, creditors must stop calling you until your bankruptcy proceeding is resolved. The stay also means that the bankruptcy judge will be able to help modify your loans.

Preventing Foreclosure
One of the main benefits of an automatic stay is its ability to pause any foreclosure proceedings. If you have fallen behind on your mortgage payments, you will probably receive notices from the bank alerting you to the possibility of bank repossession. Filing either Chapter 13 or Chapter 7 bankruptcy ensures that the collection and foreclosure processes are paused. You are allowed to stay in your home at least until the resolution of your petition. At your bankruptcy hearing, a judge will be able to restructure your mortgage to help you pay it off in a shorter period of time.

Opening the Door to Modification
A bankruptcy judge has the power to change the terms of your loans, forcing creditors to adhere to his or her order. As a result, lenders that may not have been initially open to the idea of loan modification will now be compelled to make life easier for you.