Automatic bankruptcy stay – often people filing for bankruptcy have faced weeks, months, or even years of harassment from creditors demanding payment and threatening lawsuits and collection actions. Filing a chapter 7 or a chapter 13 bankruptcy puts a stop to all their actions. Filing your bankruptcy petition instantly creates a federal court order (called an “Bankruptcy Order For Relief” also know as the “automatic bankruptcy stay”).
The “automatic bankruptcy stay” is one of the fundamental debtor protections provided by the bankruptcy laws. The “automatic bankruptcy stay” requires your creditors to stop all collection efforts. So, at least temporarily, most creditors cannot call you, write dunning letters, garnish your wages, empty your bank account, go after your car, house, or other property, or cut off your utility service or welfare benefits. The “automatic bankruptcy stay” does not cover all situations. Some creditors are not affected by the “automatic bankruptcy stay”, and others can get the stay lifted to collect the debt, but they must get the judge’s permission first.
The “automatic bankruptcy stay” is really automatic. There is no bankruptcy hearing to attend and a federal bankruptcy judge’s signature is not required to put the stay in place. It is put in place automatically when your bankruptcy petition is filed. Creditors are bond by the stay even before they know you have filed the bankruptcy petition, but they can not be sanctioned until after they are notified of your bankruptcy petition.
Automatic bankruptcy stay can be lost though your own actions however, for example if you have had a bankruptcy case pending within the year before filing your current case or if you don’t meet the deadlines set out in the bankruptcy laws.
If you are interested in learning more about the “automatic bankruptcy stay” and how it can help your financial situation, call CJ and the Remboldt Law Firm, LLC Law Firm at 404-348-4081 to arrange your free phone or in-person bankruptcy consultation.