It’s important to understand that, once you file for bankruptcy, an automatic stay is put into place that prevents creditors from taking action against you or seizing your property during the proceedings. Regardless of whether you file for Chapter 11, Chapter 12, or Chapter 7, an automatic stay can provide crucial protection as you seek relief from unmanageable debt.
Specifically, the automatic stay in bankruptcy can help by stopping:
There are, however, certain circumstances in which an automatic stay may not help. For example, while the stay will prevent the IRS from seizing your property or issuing a tax lien, you may still be audited by the IRS or sent a deficiency notice. In addition, bankruptcy does not stop required child support. alimony payments or criminal proceedings.
In some cases, a creditor may be able to request that the automatic stay be lifted. In order to do so, the creditor must submit a motion to the court explaining why the stay should no longer be in place. If the court grants the motion, the creditor can move forward with their collection efforts.
If you filed for bankruptcy and your case has been dismissed within the last year, the automatic stay will only remain in place for 30 days, absent obtaining Court approval for an extension. Additionally, an automatic stay is not permitted if you’ve filed for bankruptcy three times in a year.
The knowledgeable bankruptcy attorneys at Rountree Leitman & Klein LLC assist clients throughout Georgia who are seeking relief from creditors and debt through bankruptcy. Call 404-737-9623 or contact us online to schedule a free consultation in our Atlanta office.
Rountree Leitman Klein & Geer, LLC's blog is a resource provided to clients, prospective clients, and colleagues that discusses issues related to Personal Bankruptcy, Business Bankruptcy, Collections, and Litigation.