The automatic stay is a powerful bankruptcy protection that immediately stops nearly all creditor action against a debtor. The automatic stay is a temporary injunction against debt collection and is meant to give the debtor a “breathing spell” from his creditors. The automatic stay permits the debtor to attempt a repayment or reorganization plan, or simply to be relieved of the financial pressures that drove him into bankruptcy.
This protection is immediate and “automatic” upon filing a bankruptcy petition – no hearing is necessary. The stay is a legal injunction ordered by the bankruptcy court that prohibits a creditor with a claim that arose before commencement of the bankruptcy case from taking many actions, including:
- contacting the debtor to request payment (stops collection calls)
- initiating or continuing a lawsuit against the debtor (stops lawsuits)
- enforcing a judgment against the debtor (stops wage garnishments)
- repossessing personal property or foreclosing on real estate (stops repossessions and foreclosure)
While the automatic stay is immediate, it is not permanent. The stay can be contested by a creditor and lifted by the bankruptcy court after notice and a hearing. There are also a few exceptions to the automatic stay protections, for instance: the automatic stay does not prevent criminal prosecution. Likewise the automatic stay does not stop lawsuits to establish or modify alimony, maintenance, or support.
Individuals that file for bankruptcy receive this powerful legal injunction against creditor actions. However, the automatic stay is just one weapon in your bankruptcy attorney’s arsenal. Your attorney can use the power of the bankruptcy laws to help you make the best decisions for your family’s future financial health. If you are struggling with debt, consult with one of the experienced bankruptcy attorneys at Haines and Krieger and learn how the federal bankruptcy laws can help you. Contact us for a free consultation today.
For a free consultation or if you need any assistance from Las Vegas Bankruptcy Attorneys, or have questions about Las Vegas Chapter 7 Bankruptcy, or Las Vegas Chapter 13 Bankruptcy, or Las Vegas Debt Settlement, please call the offices of Haines and Krieger at 702-880-5554 today.