Debt is an overwhelming reality hundreds of thousands of Americans deal with every year. Many individuals face a magnitude of debt and may need to turn to bankruptcy for financial relief. Filing for Chapter 7 and Chapter 13 bankruptcy can give you the reprieve you need for a fresh start, beginning with an automatic stay.
Learn more about an automatic stay below.
What is an Automatic Stay?
An automatic stay is a temporary federal injunction that prohibits collection efforts from most creditors, collection agencies, government entities, and other individuals. It is immediately put into place when you file for Chapter 7 or Chapter 13 bankruptcy and is one of the biggest benefits of bankruptcy. An automatic stay offers an immediate, although temporary, reprieve from the aggressive efforts put forth by collection agencies and creditors while debtors work to restore their financial stability. It is important to remember, an automatic stay does not remove debt but pauses efforts to collect.
An automatic stay will protect a debtor against several actions from creditors, such as initiating or moving forward with court proceedings against the debtor, foreclosure of the debtor’s property, creating or enforcing liens, and attempting to repossess the debtor’s collateral. If a creditor attempts to collect or try to contact the debtor after an automatic stay is put into place, a debtor can sue the creditor.
When Does an Automatic Stay Go Into Effect?
Within one to two days, a written notice of your bankruptcy filing is sent to the list of creditors found on your creditor matrix by the court clerk. However, because of varying delivery times, creditors may not receive notice for a week or more. Should a creditor be accidentally left off your list, you must update the court clerk as quickly as possible to ensure they are notified of your bankruptcy filing.
How Long is an Automatic Stay?
The length of an automatic stay varies, but generally speaking, it is as long as the bankruptcy. As long as the case is open, your automatic stay is enforced. If the court dismisses a case, the automatic stay will cease. However, certain circumstances, such as serial filings, can further limit the length of an automatic stay.
Automatic Stay Exceptions
Several actions are not subject to an automatic stay, including:
- Certain tax proceedings
- Collection efforts on debts incurred after filing for bankruptcy
- Divorce proceedings
- Criminal proceedings and investigations
- Actions to establish paternity, child support, alimony, custody, and visitation.
Contact Charles W. Daff, Bankruptcy Attorney
Find the financial relief you are seeking with an automatic stay. If you are facing an overwhelming amount of debt with no end in sight and are in the Santa Ana, CA area, contact Charles W. Daff, Bankruptcy Attorney. Charles W. Daff has over 30 years of experience helping individuals and businesses with Chapter 7, Chapter 13, and Chapter 11 bankruptcies. With a wide range of knowledge and experience, Charles W. Daff, Bankruptcy Attorney will help you navigate this complicated process and give you the representation and counsel you need. Contact us today to schedule your free consultation.