The instant you file bankruptcy, your creditors are required by law to stop trying to collect. They must stop calling you or sending you collection letters. They are not allowed to repossess your car or sue you. Your wages can not be garnished even if a garnish order is already in effect.

Automatic stays will remain in effect until you complete your bankruptcy and receive a discharge, the BK judge lifts the stay at the request of the creditor, or the property you are seeking to protect is no longer part of the bankruptcy estate.

There are instances when an automatic stay will not be in affect the instant you file bankruptcy or will require a motion from your BK lawyer to keep it in effect. These situations typically pertain to individuals that have filed bankruptcy more than once.

**There are many debts that are not dischargeable by a bankruptcy.

Below are some details regarding what an automatic stay will stop:

In the event that your home is in foreclosure, the automatic stay will put a halt to the foreclosure action. Your best option to prevent foreclosure is by filing a Chapter 13 bankruptcy. With a Chapter 13, you can save your home from being foreclosed on anytime prior to the sale of your home. It is important to note that even a Chapter 7 bankruptcy will halt foreclosure temporarily in most instances.

Utility shut-offs
If your gas and/or lights have been turned off by your utility provider, they must reconnect your service as soon as you file your bankruptcy. If you are not shut-off, but are being threatened that you are going to be, an automatic stay will prevent the disconnection. It is common to be required to pay a small deposit by the utility company within a reasonable timeframe. If you do not pay this deposit, they can turn your lights and heat off even after you file bankruptcy.

Once an automatic stay is in force, your car can not be repossessed. However, you will ultimately begin paying your car loan or turn the vehicle in during a Chapter 7 BK. On the contrary, a Chapter 13 bankruptcy can save your car, but you will be required to make all of your trustee payments, or the vehicle creditor can request the judge to "lift the stay" so they can repossess your car lawfully.

Declaring bankruptcy puts an instant stop to wage garnishments and lawsuits instantly. You can take your entire paycheck home and if the debts are able to be discharged, you can likely eliminate all of your debts via the bankruptcy.

Food Stamps/SSI/Public Benefit Overpayments
In the event that you have received overpayment for a public assistance agency, the agency can collect the overpayment. However, once you file bankruptcy, the automatic stay prevents the agency from collecting the overpayment unless the agency demonstrates that the overpayment was a result of fraud.

Tax Levies
As a result of the automatic stay, the IRS can not issue a tax levy or seize any of your property in order to satisfy an overdue tax debt. However, you can still be audited by the IRS, demand that you file your returns, assess you a tax liability, and demand that you remit payment for the assessment.

Below are examples of what an automatic stay will not stop:

Criminal Proceedings
If you have been charged with a criminal action, filing bankruptcy will not prevent that state from imposing fines and court costs and/or prosecuting you. However, fees you owe an attorney can be stayed from collection.

Support Actions
A lawsuit seeking to establish paternity or to establish, alter, or collect child support will not be stopped by an automatic stay.

Filing Bankruptcy
How to File Bankruptcy
Bankruptcy FAQ
Is Bankruptcy Good or Bad?
Types of Bankruptcies
Importance of Credit After Bankruptcy




Home - Apply Now - How It Works - Approval Requirements - Testimonials
 Contact - Rates & Fees - Credit Help Info - Site Navigate

Types of Personal Financing Opportunities Offered:
Unsecured Personal Loans - Bad Credit Personal Loans
Consolidating Debt with Personal Loans

To Read our Privacy Policy, click here
Copyright 2012 -