As Beloit bankruptcy lawyers, we regularly consult Beloit-area individuals who are either seriously considering bankruptcy, or who’ve already identified bankruptcy as their best course of action in combating their debt.
Regardless of whether a solid plan to file bankruptcy is in place, our clients understandably voice concerns about their financial safety at this early stage of the
- Am I in danger of having my property repossessed at any point while undergoing bankruptcy?
- Am I in danger of foreclosure or other lawsuits?
- Will I continue to receive letters, phone calls, and other collection attempts from creditors?
These are important questions to consider upon filing for bankruptcy—by now, you’ve probably endured more nagging collection phone calls than you can remember, and would prefer they stop altogether if only for your own sanity.
And they will, thanks to an injunction embodied in the Bankruptcy Code called “Automatic Stay 11 U.S.C. Section 362.”
Protection For Debtors
At its heart, Automatic Stay 11 U.S.C Section 362 is an immediate prohibition barring creditors from taking multiple forms of action against debtors, including:
- Commencing or continuing proceedings against a debtor with respect to a claim arising prior to filing bankruptcy.
- Enforcing a pre-filing judgment against a debtor or debtor’s property.
- Taking action to obtain possession of a debtor’s property.
- Asserting set-off (or counterclaim).
- Taking action to create, perfect, or enforce lien (the right to keep property belonging to another person until a debt is paid) except as provided.
In addition to offering tremendous relief, the Automatic Stay can be very convenient to debtors during the early stages of bankruptcy—Automatic Stay goes into immediate effect upon filing for bankruptcy, requiring no further action or notice.
And if a creditor were found to be in violation of Automatic Stay, the creditor might be subject to contempt action. What does that mean for you? You may be owed damages in such situations where a creditor continues to make collection attempts.
When Does Automatic Stay End?
If you’re considering bankruptcy, it’s important to understand when and how Automatic Stay is subject to termination.
Automatic Stay terminates:
- When property is sold or abandoned.
- The case is discharged or dismissed
- The creditors motion the court for a Relief From Stay (permission to resume debt collection attempts).
Please be aware that bankruptcy law is a very complicated area of practice. If you’re a Beloit-area resident considering bankruptcy, be sure to seek the counsel of an experienced Beloit bankruptcy lawyer.
If you’re interested in learning more about Automatic Stay from Beloit bankruptcy lawyers, The Fitzgerald Law Firm, contact us today.