By the time many people consider filing bankruptcy, they are buried in creditor collection calls or perhaps even threatened with wage garnishment, foreclosure or repossession. Consequently, it is a relief to understand what an automatic stay does for you. Filing a bankruptcy petition automatically triggers a court order called an automatic stay. An automatic stays prevents creditors from continuing collection and other legal actions against you. This includes —
Collection letters or phone calls
In certain situations, the stay does not protect you, such as with a tax audit or assessment or an eviction when you were a danger to other tenants.
Also, creditors can enter a motion to the court for a relief from automatic stay. A relief from automatic stay is a formal request that the court lift the automatic stay regarding a particular issue that the creditor has. For example, if you are not making mortgage payments in a Chapter 13, the mortgage company may pursue a motion to lift the stay. In doing so, the creditor must prove to the court that grounds exist for the court to lift the stay. The court conducts a hearing to hear both sides and render its decision. At this point your lawyer would argue against lifting the stay.
By disclosing all details of your financial situation to your bankruptcy lawyer, the lawyer can anticipate whether the automatic stay insulates you from all creditor actions. For example, when you owe child support or alimony, an automatic stay does not protect against collection of this debt.
For legal help, consult Harold Shepley & Associates. We are a Pennsylvania debt relief law firm, and our attorneys offer a free consultation to answer your questions and review your financial situation. Call 1-866-284-7062 or visit us at www.shepleylaw.com.