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The Automatic Stay in Bankruptcy

GeorgetteMillerLaw.com > Practice Areas  > Bankruptcy Solutions > The Automatic Stay in Bankruptcy

The automatic stay in bankruptcy stops any creditor from continuing collection action against you. This includes credit cards, medical bills, child support or your mortgage company.

If you are facing eviction or foreclosure, or if your job is in jeopardy due to multiple wage attachments, the automatic stay in bankruptcy may be very beneficial.

What The Automatic Stay Can Do

If you are behind on utility bills and facing disconnection of service, the automatic stay will prevent the disconnection for at least 20 days. An automatic stay temporarily stops foreclosure proceedings, although the proceedings may proceed at a later date unless you are able to include it in your bankruptcy.

If you are a renter and your landlord has not filed a judgement of possession against you, it is possible you can delay the eviction for a few days or weeks. If you were overpaid public benefits, you must normally repay the overpayment. The automatic stay prevents the agency from collecting on those overpayments. Bankruptcy can also stop wage garnishments and you may even be able to discharge the debt through your bankruptcy.

What The Automatic Stay Cannot Do

A bankruptcy automatic stay cannot stop the Internal Revenue Service from garnishing your wages or seizing property. In addition, child support or alimony cannot be included in your bankruptcy, although any arrears may be included in your payment plan.

Pension or other retirement account loans will not stop if you file bankruptcy. If you owe money due to a criminal proceeding, such as fines or penalties, you may still be required to pay those. If you had a bankruptcy case pending during the previous year, the stay automatically ends after 30 days unless it is continued by the trustee or a creditor. If a creditor filed a motion to lift the stay during the previous case, the courts may believe you acted in bad faith.

Getting Around the Stay

There are times when a creditor will attempt to get around the automatic stay. The creditor has the right to request that the stay be lifted if they believe it is not serving its intended purpose.

If your house is about to go into foreclosure, you have no equity and you do not have enough income to pay the arrears through a payment plan, the mortgage holder may request that the stay be lifted so that foreclosure proceedings can continue. In most cases, a court will grant the request.

If you or a loved one is facing job loss due to multiple wage garnishments or your utilities are in danger of being disconnected, contact the Law Offices Of Georgette Miller and Associates today to learn what rights you may have. You can arrange for an initial consultation by calling us today or visiting our website.