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Automatic Stay in Bankruptcy
One of the many benefits that filing for bankruptcy provides to delinquent borrowers is the protection of the automatic stay. This stops creditors from taking any collection actions against a borrower while their bankruptcy case is pending, which saves the borrower not only from harassing phone calls and letters, but also from having lawsuits filed against them. This respite can be particularly helpful if the borrower’s house is at risk of foreclosure.
Our St. Petersburg bankruptcy attorneys can further explain how the automatic stay can help with your unique situation. Our team can work closely with you and explain how to proceed once the automatic stay is in effect.
What Can an Automatic Stay Stop Temporarily?
Although the automatic stay does not offer protection in all circumstances, it can be helpful for many things.
Typically, an automatic stay can temporarily halt collection actions such as the following:
Foreclosure actions: If you are behind on your mortgage and risk losing your home, the automatic stay will temporarily halt foreclosure actions.
Evictions: Unless your landlord takes up the issue in court, the automatic stay may be able to buy you a few weeks time if you are facing eviction.
Utility disconnections: If you are behind on your utility bills, the automatic stay can prevent disconnection of your phone, electric, or water services for at least 20 days.
Multiple wage garnishments: Most wage garnishment actions can be stopped once bankruptcy is filed, allowing you to enjoy a full paycheck temporarily.
Repossessions: When you file bankruptcy, creditors are prohibited from repossessing your vehicle. If a repossession has already happened, your attorney can help you recover your vehicle before your lender sells it in an auction.
All creditor calls: Creditors must stop contacting you to collect any debts once you file for bankruptcy.
Although all of these actions can be affected by an automatic stay, there are certain exemptions to be mindful of.
An automatic stay cannot prevent actions such as:
- Specific tax proceedings, such as an IRS audit. However, it can still stop seizures of your properties or liens.
- Child support actions, including lawsuits to collect support.
- Criminal proceedings
Staunch Legal Advocacy for St. Petersburg, Florida Bankruptcies
If you are considering the benefits of an automatic stay, it is important to work with an attorney with significant experience in debt relief and Florida bankruptcy law. Our St. Petersburg bankruptcy lawyers at Boss Law have been providing effective debt solutions to Florida residents for more than a decade.
You can rely on our team to protect you and guide you through the bankruptcy process. We encourage you to contact our firm today to talk about the best process for you. We can discuss your situation and determine whether Chapter 7 or Chapter 13 is right for you while also providing information about how the automatic stay could affect your case.