The Bankruptcy Automatic Stay-Modesto Lawyers

Many times it is all the harassment from the creditors that push people into bankruptcy. Every day like clock work they call and make threats to sue individuals and take their money via garnishment, lien or levy. The bankruptcy automatic stay puts a stop to all this. It is referred to as “automatic” because debtors receive protection automatically once they their bankruptcy petition is filed, whether it be a chapter 7 or 13.

The Automatic Stay Stops Creditors-Attorney Modesto

The automatic stay requires all creditors to stop any and all collection actions. For example, they can’t reposes your car, foreclose your home, levy your bank account, or garnish your wages. In fact, creditors are not even allowed to call you once you file your bankruptcy. Many people file for bankruptcy to stop a foreclosure sale date or a wage garnishment and that is completely fine. Let's say for example your foreclosure sale date is next week so you hurry up and file for bankruptcy, the foreclosure date gets postponed indefinitely. The lender that owns the home must file a motion in bankruptcy court and ask the judge for permission to foreclose. This is called “relief from automatic stay.” Because creditors are required to give notice they usually don't get a hearing date until at least a month after you file for bankruptcy. Once they are granted relief from automatic stay, then they can sell the home

When the Automatic Stay Doesn't apply-Attorneys Modesto

The automatic stay usually doesn't apply to child support and spousal support type actions. There are other situations where the stay doesn't apply, but they don't come up very often.

How to Lose Protection of the Automatic Stay-Modesto Lawyers

If you file a bankruptcy petition within the past year and the case was dismissed, the automatic stay will only last 30 days the second time around. If you want extra time you will have to petition the court. If you had two bankruptcy petitions dismissed within a year of filing, you won't get any stay protection. Again, you will have to petition the bankruptcy court and convince the judge that your previous filings were not in bad faith.