When an individual files for bankruptcy, an automatic stay, which is a temporary federal injunction, is triggered, halting the majority of collection efforts by creditors, collection agencies, and government entities. This is an incredibly helpful feature for debtors, giving them relief from the constant onslaught of phone calls and letters as they focus on trying to resolve their financial problems. That said, automatic stays come with some limitations. Of course, it does not clear a person’s debt. It simply removes one of the most stressful hardships many debtors face while their bankruptcy case is open.
Automatic stays are binding in every court, jurisdiction, and proceeding. If you are being harassed by creditors, an automatic stay will put an end to this type of behavior.
Actions Not Covered Under an Automatic Stay
Unfortunately, an automatic stay cannot protect you from everything. Actions not stayed include:
- Collection attempts for debts you incurred after filing for bankruptcy
- Certain tax proceedings
- Eviction in cases where you have risked property, used a controlled substance on the premises, or a judgment against you was issued before you filed for bankruptcy
- Divorce proceedings
- Actions to establish or continue alimony
- Criminal proceedings or investigations
- Lawsuits that were initiated after you filed for bankruptcy
These are just a handful of the actions not covered under an automatic stay. Your bankruptcy attorney will be able to review a full list of actions that are not covered and how it might apply to your case.
When Does an Automatic Stay Go Into Effect and How Long Does it Last?
Within 24 to 48 hours of filing a petition for bankruptcy, the court clerk will send a notice of the bankruptcy filing to your creditors. It is possible, however, that a creditor might not receive this notice for up to a week since delivery times vary. Once in effect, your creditors cannot initiate or continue actions against you.
The length of your automatic stay will generally last throughout the duration of your bankruptcy case. In some cases, it might be possible to limit its duration. For example, if a creditor pursues relief from the automatic stay and the court does not act within a certain timeframe, the automatic stay will no longer apply to that particular creditor. If this happens to you, consult with your attorney to learn what steps you can possibly take next to remedy this.
What Happens When Creditors Violate an Automatic Stay?
Violating an automatic stay is a serious offense. In fact, it is equivalent to disobeying a court order and, as such, is punishable by law. Penalties include contempt, damages, sanctions, or even a combination of the three. If a creditor violates an automatic stay you have in place, notify your attorney immediately, so he or she can act quickly.
Bankruptcy Attorneys in Brevard County
If you are going through a difficult financial time and are unable to keep up with mounting debts, bankruptcy might be an appropriate solution for you. At The Buchalter Law Group, our team of bankruptcy attorneys in Brevard County have more than three decades of experience. Put an end to the harassing phone calls and letters and reach out to our law firm today to get the relief you need.
Call us at (321) 320-6088 to schedule your free case evaluation!