The Automatic Stay

The filing of a chapter 7 or Chapter 13 bankruptcy case automatically stays (stops or suspends) virtually all collection attempts (including those harassing phone calls), attachments, garnishments, foreclosures, and other actions by creditors against the person filing (the debtor) and their property.  A few days after a chapter 7 or 13 bankruptcy case is filed, the court will mail a notice to all creditors ordering them to refrain from taking any further action against the debtor.  Any creditor who intentionally violates the automatic stay may be held liable in damages to the debtor.

However, criminal proceedings and actions to collect domestic support obligations are not normally stayed. The automatic stay also does not protect cosigners and guarantors of the person filing, and a creditor may continue to collect debts from those persons after the case is filed (chapter 7) or completed (chapter 13). Also, debtors who have had one or more recent bankruptcy cases dismissed may have the automatic stay shortened or denied altogether.

Caveat: A creditor could make a motion to “lift” the automatic stay. Such a motion, if granted, would allow that creditor to continue collection efforts against the debtor or their property.

Bankruptcy Attorney in Mineola

As always, the Law Firm of Vaughn, Weber & Prakope, PLLC is here to assist you.  We are conveniently located in the heart of Nassau County, Long Island, at 393 Jericho Turnpike in Mineola, NY 11501.  Contact us at (516) 858-2620 to arrange a consultation with a bankruptcy attorney.

Please visit our Bankruptcy category to learn more about filing chapter 7 or 13 bankruptcy.