Bankruptcy provides immediate relief for certain debt collection activities by placing what is called an automatic stay on wage garnishments, credit card lawsuits, and other actions. At Anidjar & Levine, our Fort Lauderdale bankruptcy attorneys can discuss the benefits of filing for bankruptcy, including how an automatic stay can help prevent some creditors from taking action or pursuing further actions against you. Our lawyers can assess your unique situation and discuss the debt relief available to you through bankruptcy.Advantages of an Automatic Stay
One of the benefits of filing for bankruptcy is the automatic stay. Filing for Chapter 7 or Chapter 13 bankruptcy places an automatic stay, or immediate stop, on most collection activities. Creditors have to stop any further attempts to collect on a debt, and they cannot initiate new collection activities while your case is pending. It also stops any creditor harassment, including harassing phone calls to pay your debt.
The automatic stay does not apply to all creditors, but in cases where it does apply, it can relieve a number of burdensome and distressing debt collection attempts.
Depending on your particular situation, the automatic stay can help stop crucial debt collection attempts in their tracks. It can prevent:
- Foreclosures: A Chapter 13 bankruptcy is particularly effective at stopping foreclosures if you want to save your home. You can reorganize your debt and propose a method for dealing with any arrearage while remaining in your home.
- Wage garnishment: Filing for bankruptcy does not prevent wage garnishment for child support or alimony, but it does stop certain creditors, like credit card companies, from garnishing your wages.
- Vehicle repossession: Filing for Chapter 13 bankruptcy will prevent a car loan lender from repossessing your vehicle while you work out a debt repayment plan that includes proposed payments to cover any arrears and future car loan payments.
While the automatic stay provides immediate relief for some debt collection, there are other proceedings that the automatic stay cannot stop. Tax audits, criminal proceedings, and child support actions, for example, are not stayed because you filed for bankruptcy. Those proceedings and any collection for those obligations will continue regardless of whether or not you file for bankruptcy.Lifting the Automatic Stay
A creditor may ask the bankruptcy court to lift the automatic stay. A court will lift, or remove, the stay if the creditor can demonstrate a valid reason for it. For example, in the case of vehicle repossession in Chapter 13 bankruptcy, you can keep your car as long as you make adequate protection payments while approval of your debt repayment plan is pending. If you fail to make the payments, the car loan lender can ask the court to lift the stay and proceed with the repossession of your vehicle. A court will lift the stay if it finds that you are not making the payments and cannot catch up on your missed payments.
In some cases, a creditor will try to collect on a debt even after you have filed for bankruptcy. For example, a creditor may continue to garnish your wages despite your filing. Unless the court has removed the stay for a particular creditor, or a debt is non-dischargeable, a creditor cannot continue collecting on a debt after you file for bankruptcy. You should notify your bankruptcy attorney if a creditor continues with collection activity even after it is notified of your filing.Bankruptcy Attorneys in Hollywood Dedicated to Your Case
The Hollywood bankruptcy lawyers at Anidjar & Levine offer dedicated representation in bankruptcy-related matters. Our capable attorneys will review the specific facts of your case and discuss the options available to you. We can advise you on how an automatic stay can reduce creditor harassment and debt collection activities. We serve clients in South Florida communities including West Palm Beach and Broward County. For a free and confidential consultation, please call us at (800) 747-FREE or complete our contact form today.