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No, a domain name does not stop working when you initiate a transfer. In fact, the domain "freezes" where you are unable to make any changes during the domain name transfer.
I would recommend that you contact RescueGroups.org support for assistance with your domain transfer and services.
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I submitted request for domain name transfer to rescuegroups. It says it takes 5-7days. So now I can't access my website or email...is that the way it is supposed to work?? We can't even get to our applications.