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Automatic Stay in Bankruptcy

Defense Against the Liabilities of Debt

When you owe large amounts of money and are falling behind on your loan payments, you are at risk of suffering serious consequences which can have an enormously disruptive effect on your life. As soon as you default on a debt, the creditor may pursue legal action against you to recover the balance of what you owe, and this may result in a wage garnishment that places an enormous drain – up to 25 percent – on your already strained income.

Your vehicle or other possessions may be repossessed, and you could even lose your home to foreclosure. Unfortunately, you may have no way of handling the situation by catching up on your missed payments – after all, you got into this position as a result of the fact that you didn't have enough money to make your loan payments in the first place.

Automatic Stay Against Creditor Actions

The good news is that there is one thing you can do which will immediately halt any type of adverse creditor action against you: you can file for Chapter 7 or Chapter 13 bankruptcy. You do not have to wait until the completion of your bankruptcy case before enjoying relief from your creditors, because as soon as you file your petition with the court you will be protected by an automatic stay.

The automatic stay is an injunction that legally prohibits your creditors from continuing to pursue you for payment of the amounts that you owe. It is not a cure-all. For example, an automatic stay will not halt a wage garnishment which is being used to recover unpaid child support. It will, however, apply to most types of debt.

Details About the Automatic Stay

The automatic stay remains in effect until your bankruptcy case is completed, or until your petition is dismissed by the court. In either scenario, it provides you with some much-needed relief from the pressure and anxiety of worrying about opening your mail to find a notice of foreclosure or looking out the window to see that your car is being repossessed.

It is also important to note that certain creditors may be able to go to court to challenge the automatic stay and obtain an exemption. This is one of the reasons why you should only attempt this course of action with the help of an experienced Irvine bankruptcy lawyer who can defend your case in court and work to ensure that you get the greatest possible benefits out of the action.

Contact Peter Rasla & Associates, P.L.C. now for a free initial consultation to discuss your situation and determine whether bankruptcy is the best course of action for you.

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