What Is the Automatic Stay in Bankruptcy?

How Does It Protect You? Can You Lose Its Protections?

What Is the Automatic Stay in Bankruptcy?One of the most physically and emotionally exhausting aspects of struggling to make financial ends meet is dealing with the non-stop phone calls, letters, emails, text messages and other communications from creditors. Your heart can jump every time the phone rings and you can get a pit in your stomach whenever you walk to the mailbox. Fortunately, when drafting the American bankruptcy laws, Congress understood the level of harassment debtors often face and included the “automatic stay.”

What Is the Automatic Stay in Bankruptcy?

The automatic stay goes into effect immediately upon the filing of your bankruptcy petition. It prohibits your creditors from attempting to collect a debt from you through any means other than the bankruptcy court and the bankruptcy proceedings. Once your creditor has been notified of the bankruptcy filing, collection calls and letters must stop, any legal proceedings must be suspended, and any property seized, but not sold, must be returned.

What Happens If a Creditor Ignores or Violates the Automatic Stay?

If a creditor intentionally or willfully engages in an act that violates the automatic stay, sanctions may be imposed. It’s important to understand that a creditor’s actions will be considered willful if that act was intended to violate the automatic stay. A debtor does not need to show that the creditor intended to violate the law. Sanctions may include costs and attorney fees, as well as punitive damages (though such penalties are rare).

Can You Lose the Protection of the Automatic Stay?

Individual creditors can petition the court for removal of the automatic stay. Furthermore, if your bankruptcy is dismissed for any reason, the automatic stay will immediately go away.

Contact an Experienced Rockwall, TX Bankruptcy Attorney

There’s no time like the new year to get a fresh financial start. At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County and the surrounding counties.

Call Rockwall bankruptcy lawyer Carrie Weir at 972-772-3083 or fill out the contact from below for a free, confidential consultation to discuss your options.

How Can I Help

Complete the contact form
and I will email you.

  • This field is for validation purposes and should be left unchanged.

Consumer Bankruptcy

Can I keep my car? Will bankruptcy stop a foreclosure? Will I ever be debt-free again? How will I ever pay these medical bills?

Read More

Chapter 7 Bankruptcy

If you want to stop creditor harassment, eliminate repossession debt, stop garnishments and keep your house, and car, a Chapter 7 bankruptcy could help.

Read More

Chapter 13 Bankruptcy

Are you in jeopardy of losing your house? Are you making good money but everyone is asking for payment right now? Do you want or need to stop collections?

Read More