The Automatic Stay In A Bankruptcy Filing

One of the main benefits for someone filing for bankruptcy is the automatic stay. In fact, many people end up filing for bankruptcy because their creditors have become too aggressive and the only thing that will get them off their back is bankruptcy. After the bankruptcy petition is filed with the court, the automatic stay is put in place stopping all actions by creditors in an attempt to collect on a debt. The automatic stay has a powerful benefit for the debtor including, stopping all contact with the creditor, foreclosure, lawsuits, judgments and wage garnishments. Once the stay is in place, creditors can no longer contact the debtor for anything. If they feel the need to talk they better do it through the bankruptcy attorney.

Proper planning will allow you to proceed with your bankruptcy making the right decisions without having to be in a rush. When it comes to bankruptcy many individuals create their own problems because of waiting until the last minute to call. Be proactive and take a minute to fill out the form to get a FREE NO OBLIGATION CONSULTATION with a local bankruptcy attorney to discuss your situation.

 

 

When Creditors Violate The Automatic Stay

Over the last couple years, creditors have felt the need to push the envelope and violate the automatic stay. Many times, they will use the excuse that they have not been notified properly and ask for the bankruptcy filing number. They can no longer use the excuse that they haven’t been notified from this point forward. Typically, the most aggressive creditors are debt collection companies that have purchased the debt from the original creditor. The debt collectors usually are very brazen in their collection tactics almost like they don’t care that there is a court order in place stopping this kind of behavior. All the bankruptcy attorney has to do is call them and if they won’t stop, file a motion with the bankruptcy court asking for sanctions against the creditor. Depending how flagrant the violation is, the bankruptcy judge could award legal fees and damages to the debtor.

Using The Automatic Stay To Stop Foreclosure

Many people use a bankruptcy filing to stop foreclosure. The automatic stay is what gives bankruptcy the power to stop foreclosure and buy the individual some time to hopefully work something out with the lender. If nothing can be worked out, the lender will file a motion for relief from automatic stay. If the lender can prove the ownership of the property, the court will usually grant the relief from automatic stay. At this time the creditor is able to proceed with the foreclosure.

Exceptions to Automatic Stay Bankruptcy Protection

There are some exceptions to the automatic stay bankruptcy protection. These exceptions typically involve court orders against the debtor like, child support, alimony, IRS audits, criminal prosecution, paternity and court ordered restitution. While the bankruptcy automatic stay protects from just about everything, these things cannot be included. To make sure it’s best to consult a bankruptcy attorney if there is a gray area.

The Automatic Stay Chapter 7 And Chapter 13 Bankruptcy

Bankruptcy’s powerful tool, the automatic stay Chapter 7 and Chapter 13 are just two chapters that are protected under the law. Many people filing Chapter 7 bankruptcy enjoy the power of the automatic stay to get creditors off their back. The typical person filing Chapter 7 usually has a large amount of unsecured debt and these creditors are usually the ones that are relentless with collection tactics. This immediately gives the debtor relief, as the creditors can no longer call them. When it comes to Chapter 13 bankruptcy, the automatic stay is usually used to stop foreclosure and allow the debtor to negotiate back payments and even possibly a reduced amount on the loan balance. Typically, Chapter 13 is used to protect property and the automatic stay puts teeth to this chapter. The automatic stay is the most powerful tool in the arsenal of the bankruptcy attorney and is what gives bankruptcy so much power over other forms of debt elimination. The automatic stay is what makes creditors cringe when they find out that their customer is filing bankruptcy.