Silencing Creditors- Chapter 7 Bankruptcy's Automatic Stay
After Filing Chapter 7 Bankruptcy: The Liberation of the Automatic Stay
When you decide to take action and file Chapter 7 bankruptcy, you may be under the protection of the automatic stay.
Under the automatic stay, the bankruptcy court orders that creditors stop contacting you. And, with the protection of an automatic stay, your creditors are prohibited from suing you, garnishing your wages or repossessing your property during your case.
While the information on this page does a good job of providing an introduction to the automatic stay, you can always learn more about this secret weapon in the bankruptcy process by letting Chapter7.me connect you with a local bankruptcy lawyer.
All you have to do to get the ball rolling is fill out our free, no obligation bankruptcy evaluation form or call 1 (888) 632-0501, and we'll quickly get to work connecting you with a nearby bankruptcy lawyer from our nationwide network of sponsoring bankruptcy attorneys.
Protect Yourself & Your Hard-Earned Assets
A Chapter 7 automatic stay may not only give you back some peace to your life by shutting the creditors out, but it may also stop certain financial emergencies, like:
Your Mortgage Foreclosure
Although Chapter 13 bankruptcy is typically a better option for people who own a home with significant equity, in many cases a Chapter 7 bankruptcy filing can temporarily stop mortgage foreclosure action.
Your Vehicle Repossession
The automatic stay may prevent creditors from taking your car. However, in many states, this is only a temporary answer and you may need your bankruptcy attorney to reaffirm your car loan in order to keep your car.
Your Utility Shut-Offs
If you're behind on your utility bills, you may not have to worry about your service being shut off after you file Chapter 7 bankruptcy. Even if your service is currently shut off, the automatic stay requires that the utility service reconnect your service. However, sometimes the utility company requires a small deposit after your file bankruptcy. If you fail to provide the deposit, they might disconnect your service.
Your Lawsuits & Wage Garnishments
Your bankruptcy automatic stay may stop lawsuits and wage garnishments in their tracks. You will be able to take home your full paycheck again! And, a bankruptcy lawyer may help determine if that owed debt is dischargeable. If so, you may be able to eliminate the debt through your Chapter 7 bankruptcy.
Your Tax Levies
The automatic stay will stop the IRS from issuing a tax levy or seizing your property to satisfy delinquent tax debt. However, you should know that they might still audit you, demand you to file taxes and assess a tax liability that you may be ordered to pay.
How Long Does the Automatic Stay Remain In Effect for You?
Your automatic stay should start right after your bankruptcy filing and will remain in effect until you complete the Chapter 7 bankruptcy process and receive your Chapter 7 bankruptcy debt discharge. As soon as you and your bankruptcy lawyer file your Chapter 7 bankruptcy papers with the court, you'll be able to silence your creditors.
There may be an exception if the bankruptcy court lifts the stay at the request of a creditor, which—although uncommon—happens. If this occurs, a bankruptcy attorney can step in and defend your rights.
There may also be limited circumstances when the automatic stay doesn't immediately go into effect. This typically happens to people who have recently filed other bankruptcy cases. In these cases, it may require a motion from a bankruptcy lawyer to start or keep an automatic stay in effect.
What's Not Protected Under the Chapter 7 Bankruptcy Automatic Stay
Most debts are automatically protected under the automatic stay right after your file Chapter 7 bankruptcy. However, there are limited exceptions that may include:
Criminal Proceedings
The automatic stay doesn't stop criminal actions. For example, if you are charged with drunk driving, you may still be issued fines and court costs. However, if a criminal action can be separated into criminal and debt liabilities, the creditor may be barred from collecting the underlying debt.
Support Action
The automatic stay also may not stop a lawsuit against you seeking to establish paternity or establish, modify or collect child support or maintenance payments.
A bankruptcy attorney can be a good resource to determine if any debts aren't protected under the Chapter 7 bankruptcy automatic stay.
If you're considering filing bankruptcy or have any questions about the bankruptcy automatic stay, connect with a local bankruptcy lawyer by filling out our free, no obligation bankruptcy evaluation form or calling 1 (888) 632-0501.