Automatic Stay – Instant relief from creditors
11 U.S. Code § 362 – Automatic stay
Perhaps the most powerful tool of the entire bankruptcy code is found in Section 362. The automatic stay stops creditors dead in their tracks and prohibits them from taking any type of action against a debtor. Creditors are not allowed to contact you by phone or letter, garnish your paycheck, take money out of your account, or engage in any other collection action.
- The automatic stay takes effect as soon as you file.
- The stay protects you against collection actions, for as long as you are in bankruptcy.
- The automatic stay will stop garnishments, lawsuits, calls, and letters.
- The automatic stay will also stop foreclosure and repossession.
Exceptions to the Automatic Stay:
There are a few exceptions. If you owe child support or alimony, filing a bankruptcy will not stop your obligation to pay this. If you are behind on rent and an eviction proceeding has already begun, a bankruptcy can wipe out what you owe, but it will not protect you from eviction. If you have any type of criminal proceedings, those will be unaffected as well.
- Child support obligations.
- Criminal proceedings.
- Landlord-tenant eviction actions already underway when a bankruptcy is filed.
Stop Home Foreclosure & Auto Repossession:
One of the most powerful features of the automatic stay is that it can stop foreclosure and auto repossession. If you are behind on your mortgage payments and foreclosure proceedings have already begun, a bankruptcy can immediately put a stop to this. As long as your house has not actually sold, there is still hope. For automobiles, filing bankruptcy can stop repossessions. Additionally, if the vehicle has been repossessed, but not sold, bankruptcy can help get it back.
If you have questions about Chapter 7 or Chapter 13 Bankruptcy, please give us a call at 785-379-3600 for a FREE Consultation over the phone, in person or you can email us now.