I have Filed for Bankruptcy, What is an Automatic Stay?

So you have already filed Bankruptcy and you were notified of an Automatic Stay. But what is an Automatic Stay and how does that benefit me? As a Jacksonville Bankruptcy Attorney I strive to make sure my clients are fully informed as to the process and nuisances of filing a Bankruptcy. Very briefly, and I will go into more detail below, an Automatic Stay is a court order that protects you from certain actions by your creditors.

What does this mean for a person filing bankruptcy? What it means is most creditors must stop all collection proceedings. The most common types of creditor actions that will be stopped are: harassing telephone calls by debt collectors, threatening letters by attorneys, and lawsuits to collect on delinquent bills. Also, this stay in collection is automatic. Once you file for Bankruptcy it immediately takes into effect. Therefore, if your creditors continue to call, harass, or proceed in civil litigation you may be able to file a civil suit for violation of the Automatic Stay.

Unfortunately, an Automatic Stay does not stop collection of all types of debt. There are types of debt that survive a Stay. For instance, IRS tax liens or utilities in certain circumstances. In addition, an Automatic Stay does not affect Divorce and Child Support and Pension Loans.

A final note an Automatic Stay can be removed if you had a pending Bankruptcy filed within a year of your current case or you have missed deadlines dealing with secured debts.

If you would like more information regarding Bankruptcy, let us know and we would be happy to discuss it with you.