Method for avoiding Guest I/O timeout, including generating a request to an I/O device in a Guest Operating System (GOS) running inside a VM; setting a VM timeout deadline; in a hypervisor, setting a supervisory timeout deadline for the I/O device to respond that is shorter than the VM timeout deadline; if no response is received before expiration of the supervisory timeout deadline, pausing the GOS; freezing system time of the GOS; activating a handler for the I/O device response in the hypervisor; upon receipt of the response prior to the supervisory timeout deadline, forwarding the response to the GOS, unpausing the GOS, unfreezing the system time of the GOS; upon receipt of the response after the supervisory timeout deadline, and after the GOS is unpaused by the hypervisor, the Guest OS receives the response from the hardware device; and if no response is received, the GOS is kept paused.