Are creditors constantly calling, sending your letters or taking legal actions against you to collect your overdue debts? Under bankruptcy law § 362, there is a provision made to protect debtors from this type of treatment. According to U.S. Bankruptcy law, once a debtor files their bankruptcy petition, they are immediately covered under the automatic stay. This is an automatic injunction that goes into effect after declaring bankruptcy and it legally prevents creditors from making any further attempts of collecting their debts. When you file for Chapter 7 or Chapter 13 bankruptcy, the injunction will immediately go into effect and it can provide you relief from creditors and it give you back your privacy. It can also give you time to regroup during the bankruptcy without being constantly harassed by creditors.
The automatic stay protects you in several different ways, the main areas include:
- Creditors cannot file or continue on with judicial proceedings against you
- Creditors cannot make actions to obtain your property with foreclosure
- Creditors cannot create or enforce a lien against your property
- Creditors cannot garnish your wages
- Creditors cannot continue to contact or harass you
- Creditors cannot set off any debt owing to the debtors before the bankruptcy case commences
The automatic injunction cannot prevent against the following:
- IRS tax proceedings, tax liens and audits
- Child support, paternity, or alimony support actions
- Criminal proceedings against you
- Paying loans from a pension or IRA
- Multiple bankruptcy filings in the previous year could terminate the automatic stay
There are certain cases however, where the creditors can ask the court to lift the injunction and remove the stay- this is so debtors do not take advantage of the system. Congress provides some relief to creditors who have a secured interest in a single piece of real estate asset, in which case you might be required to make monthly payments. Also, if your landlord filed an eviction notice and obtained a judgment of possession before you entered your bankruptcy petition, then they may be able to continue that process. If your landlord tries to evict you on grounds of illegal substances or endangerment of the property after you have already filed, then they may be able to proceed as well.
The automatic stay is just one the many benefits of bankruptcy. If you are drowning in debt and you can't manage to pay your monthly expenses, then you may be able to find relief and eliminate your debt by filing for bankruptcy.
To find out more about how debtors can be protected under the automatic stay, speak with a Charlotte bankruptcy attorney from the Law Office of Jack G. Lezman, P.A. today!