Legal Matters that Won’t Be Suspended When You File for Bankruptcy
If you’ve been considering filing for protection under the bankruptcy laws to help you deal with unmanageable debt, one of the factors that may have attracted you is the automatic stay that goes into effect immediately upon filing for bankruptcy. The automatic stay prevents your creditors from calling, writing or taking legal action to collect a debt, other than through the bankruptcy proceeding. While the automatic stay will suspend legal actions related to the debt, it won’t prevent all types of legal efforts.
Criminal Prosecutions Are Not Affected
As a general rule, a bankruptcy filing won’t prevent prosecutors from filing or going forward with criminal proceedings, even if the offense is a financial one, such as embezzlement. That’s because the criminal prosecution isn’t related to the debt—it’s a consequence of your violation of the law. There is one exception, though. A bankruptcy filing will temporarily prevent government officials from taking any action to recover overpaid governmental benefits or to recover the value of damaged government property.
Most Family Law Proceedings Will Not Be Suspended
Bankruptcy is not available to discharge or reorganize support payments of any kind. Accordingly, the automatic stay won’t have any impact on your obligation to pay support, and won’t prevent government officials from taking legal action to collect delinquent support payments.
Some Real Estate Proceedings May Be Outside the Scope of the Automatic Stay
The bankruptcy court has some discretion to lift the automatic stay in the interests of fairness. For example, if a real estate lender is at risk to lose a lot of money on a property if foreclosure proceedings are suspended, the court may lift the stay. Furthermore, if a landlord has started the eviction process, but the court has not entered the eviction order, the bankruptcy court may suspend the automatic stay to allow the eviction order to be entered.
Contact an Experienced Rockwall, TX Bankruptcy Attorney
At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. I am currently communicating with clients by phone, text messaging or videoconferencing. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Rockwall County, Collin County, Dallas County, Hunt County and the surrounding counties.
Speak Your Mind