Bankruptcy And The Automatic Stay
Posted on June 4, 2009 at 2:46 am
What's up with that?
Posted on June 4, 2009 at 3:02 am
When a consumer files bankruptcy it automatically sets down a rule against creditors and lenders from further contacting the consumer regarding collections. (11 U.S.C. 362)
That stay, however, is not permanent and it could be petitioned by the creditors and lenders to be lifted.
Posted on June 4, 2009 at 3:09 am
The automatic stay has the power to halt:-the start or progress of a lawsuit
-collection calls
-foreclosure sales
-repossessions
-wage garnishment or levies (judgment)
The automatic stay is effective until:-a creditor/lender petition for it to be lifted
-the consumer obtains a discharge
-the property in question is no longer property of the state.
The automatic stay does not have power over:-criminal cases
-legal obligations (family support: child, alimony, etc.)
-tax audit, tax return demands or tax assessment, but not tax collection
Posted on June 4, 2009 at 4:18 am
Once a debtor files for bankruptcy the automatic stay immediately takes effect. Creditors are no longer authorized to contact or attempt to collect debts from the filer. Any court proceedings, actions to seize property, or enforcing liens are immediately halted.
Posted on June 4, 2009 at 4:31 am
In addition, the court may choose to grant creditors exemptions from the slay if the latter can prove that they are not given
adequate protection, or in the event that their interest in a certain piece of property would be compromised.
Creditors bearing a secured interest in one real estate asset are also provided relief, along with landlords who wish to evict their tenants who are unable to make monthly payments. If an landlord evicts the tenant and obtains a judgment of possession before the tenant filed for bankruptcy, he is also exempted from the stay. If the tenant filed for bankruptcy and was also evicted by his landlord due to actions that prove to be detrimental to the landlord's property, the court will go in favor of the landlord and grant him the exemption.
Posted on June 15, 2009 at 3:27 pm
Wait so does the automatic stay take effect for both Chapter 7 and Chapter 13 bankruptcy?
Posted on June 16, 2009 at 2:28 am
Yes the automatic slay applies for Chapters 7 and 13. It basically gives debtors breathing room from creditors as well as a finacial break from what caused them to file for bankruptcy in the first place. It also ensures that the trustee will be entirely responsible for items that will be kept, given up, and how the property will be divided in the event that the trustee would take and sell your belongings.
Posted on June 25, 2009 at 8:33 am
Wait- I thought I wouldn't have to give up or sell any property if I filed Chapter 13 bankruptcy?
Posted on June 25, 2009 at 10:17 am
Right. Chapter 7 bankruptcy forces the debtor to give up any non-exempt assets to the court appointed trustee handling the case. These non-exempt assets are sold, and the proceeds from the sale go towards paying off a portion or all of the debt that is owed.
In a Chapter 13 bankruptcy, the debtor makes monthly payments to the court appointed trustee, who disperses the money to each of the debtor's creditors to satsify the debt. Oftent he full amount is paid back in a Chapter 13 case.
Posted on July 7, 2009 at 12:39 pm
This does not really have to do with the automatic stay- but do you have to pay interest if you file Chapter 13 bankruptcy?