If you’re in danger of immediate legal action such as a foreclosure or wage garnishment, bankruptcy can provide much-needed relief, either temporarily or permanently, through the automatic stay. A stay is a court order that takes immediate effect when you file bankruptcy. It prevents creditors, collection agencies, or civil lawsuits from taking action against you. But what exactly can the automatic stay do (and what can’t it do)?
To learn more about bankruptcy and how it can protect you from creditors, contact a Middletowm, OH bankruptcy attorney at Andrade Law Office, LLC today.
What the Automatic Stay CAN Do
If your home is in foreclosure, an automatic stay will stop foreclosure proceedings. If you filed a Chapter 13 bankruptcy, you will be able to keep your home and you’ll have three to five years to make up back payments. Under a Chapter 7 bankruptcy, you will not be allowed to keep your home if you’re behind on payments, but the stay will give you temporary relief from the foreclosure action.
If you are facing an eviction, an automatic stay may not be as helpful as in the case of a foreclosure. If your landlord filed an eviction notice prior to your bankruptcy filing, the automatic stay won’t change the eviction proceedings. The best you can hope for is an eviction delay of a few days or weeks. If your landlord requests that the court lift the stay, the court will probably grant his or her request.
Multiple Wage Garnishments
Filing for bankruptcy usually stops all wage garnishments against you. You will collect your full pay check and will not have to repay any qualified debts included in your bankruptcy. However, there are certain types of wage garnishments that a bankruptcy will not erased by bankruptcy. These include child support, alimony, or back taxes. You will still be responsible for paying those debts.
Overpayment of Public Benefits
If you received an overpayment from any public benefit, the agency has the right to recoup the overpayment either from your future benefits, or directly from you. An automatic stay will prevent the agency from reducing your future benefits. But if you no longer receive benefits, you will be liable to repay the overage. Be aware that if for any reason you become ineligible for the benefits, an automatic stay will not prevent the denial or termination of your benefits.
Disconnection of Utilities
An automatic stay will prevent the utility company from shutting off your services for a minimum of twenty days. The threat of your utilities being disconnected is typically not a bankruptcy-worthy issue. But if you have other debts, you may be able to include your utility bill as a debt. If your utility bill is part of a bankruptcy, the utility company be likely to request a deposit the next time you ask for services to be connected.
What the Automatic Stay CANNOT Do
Taxes, support actions, and criminal proceedings are a few examples of situations not affected by an automatic stay.
Child support and alimony cannot be discharged in a bankruptcy and you will be required to pay them.
You can still be required to repay loans taken against pension plans including job-related plans or IRAs.
Multiple Bankruptcy Filings
Things can get a little sticky if you filed a different bankruptcy case the previous year. The automatic stay will automatically terminate after thirty days. However, if you can prove to the court that you filed the current bankruptcy in good faith, you may be able to get an extension of the stay.
If you were convicted of a crime, any punishments such as a fine or community service will not be halted by an automatic stay.
Creditors Who’ve Filed a Motion to Lift the Stay
A creditor can file a motion asking the court to lift a stay so they can collect on a debt. A creditor must file a motion to lift the stay before attempting to collect a debt or face fines or penalties. Stays are commonly lifted for foreclosures, landlord-tenant disputes, or other lawsuits.
Contact the Middletown, OH Attorneys at Andrade Law to Learn More About the Automatic Stay
To learn more about how an automatic stay can provide you with valuable legal protection during your bankruptcy proceedings, contact the Andrade Law Office, LLC today.