What is the Automatic Stay?
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The automatic stay is a Federal Court Order barring your creditors from taking any further collection activity from the moment your case is filed. The order is issued “Automatically” by the United States Bankruptcy Court. The “Stay” is a Federal Court injunction strictly prohibiting the continuation of any: foreclosure, repossession, garnishment, law suit, collection phone calls, the sending of any bill or collection letter or “payment reminder” etc. through the mail. See: 11 USC 362. In bankruptcy Chapter 7 cases, the stay lasts 90 days until your debts are discharged. In Chapter 13, the stay can last up to 63 months.
How to Get an Automatic Stay
When a consumer is struggling with debt to the point of going under, they may decide to file for bankruptcy. One of the many benefits of bankruptcy is the automatic stay that is put in place once you file your petition. This is an injunction that will automatically require all creditor lawsuits and collection activity to stop. For those consumer debtors that find themselves drowning in their debt, an automatic stay can be the timely lifeline they need.
If you are considering filing for bankruptcy in Oklahoma and want to know how this injunction will help with your situation, Alexander Hilton & Associates is here to answer your questions. Our founding attorney has been serving consumers for numerous decades, garnering some of the highest client satisfaction rates across the entire state. He is well-versed in bankruptcy laws and can provide the insightful counsel you need during this overwhelming time.
Get a bankruptcy lawyer near you on your case today! Start by filling out a free case evaluation.
How an Automatic Stay Benefits You
An automatic stay is designed to provide debtors relief when they are working towards filing for bankruptcy. As soon as a debtor files their petition, the automatic stay will immediately go into place, alerting creditors and collectors that a majority of action against you must stop. Essentially, the stay is in place to prevent creditors from trying to collect any property that now belongs to the bankruptcy estate or could be exempted under the law. If creditors or collectors do not stop or continue to harass a debtor after a stay is in place, they may be in violation of the Fair Debt Collection Practices Act.
The automatic stay can halt the following types of actions:
- Vehicle repossessions
- Evictions and foreclosures
- Collector calls, letters, or harassment
- Wage garnishments
- Disconnecting utilities
- Limited tax actions
However, an automatic stay cannot stop criminal or divorce proceedings, child support payments, certain tax liens, and other situations. Also, creditors can make a motion to have the automatic stay lifted if they believe it is not serving its intended purpose, such as if you filed for Chapter 13 bankruptcy and they feel you won’t still won’t be able to pay back the debt. This usually happens with secured creditors when the debtor has minimal equity in the property behind the secured debt, such as a car or home. That is why it is so important that you discuss your case right away with a seasoned legal advocate who can help you understand how an automatic stay will impact your financial future. This also ensures that your bankruptcy filing is as successful as possible and that your rights are safeguarded throughout the process.
What Happens After an Automatic Stay is Lifted?
Once an automatic stay is lifted, collection actions can resume. This means that creditors will start pursuing claims debtors again. Mortgage lenders can foreclose on properties and car loan creditors can repossess vehicles.
An automatic stay may be lifted for many reasons, including the completion or dismissal of the bankruptcy case. This is also true if the debtor does not comply with court orders.
Because of this, we encourage you to work with an experienced bankruptcy lawyer. This will help you navigate protecting your assets and negotiating new repayment plans with creditors after your automatic stay is lifted.
Get a bankruptcy lawyer near you by calling (405) 725-1441. We can help with your case. Start by filling out a free case evaluation.
Have More Questions? Reach Out to Our Bankruptcy Attorney Today!
At Alexander Hilton & Associates, we prioritize our clients’ needs and goals. When you come to us, we make sure to go above and beyond to ensure your assets are protected and your financial future is on the right track. If you need counsel regarding how to discharge your debts, you can count on us to provide meaningful support.
- Related Blog: What Does "Bankruptcy Protection" Actually Mean?
If you want to learn about what to expect when filing, be sure to call our bankruptcy lawyer for insight. We have been proudly serving clients throughout the state for decades!
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