Information on Automatic Stay

Provided by a Maryland and Washington DC Bankruptcy Lawyer

If you have recently filed for bankruptcy, it is essential that you learn the rights involved with automatic stay. Automatic stay is an injunction that is meant to immediately halt the actions of creditors. If you have filed for bankruptcy and are still being contacted by creditors, contact a Washington DC and Maryland Chapter 7 attorney today.

Filing a bankruptcy petition triggers automatic stay or the termination of most debt collection actions against the debtor during bankruptcy proceedings. Automatic stay arises automatically, with no judicial action, and, as long as the stay is in effect, creditors cannot initiate or continue lawsuits against the debtor, garnish wages, or otherwise demand payments from the debtor. However, the stay does not apply to certain types of actions [listed under 11 U.S.C. §362(b)] and the stay may only be effective for a short period of time.

Automatic stay is especially useful during Chapter 13 bankruptcy proceedings to protect a debtor’s home from foreclosure. Once the bankruptcy petition has been filed, any foreclosure proceedings are halted and the debtor may repay any past-due payments. However, the debtor may still lose his home if:

• The mortgage company completes the foreclosure sale under state law
• The debtor fails to make regular payments according to the Chapter 13 repayment plan

Automatic stay during a Chapter 13 bankruptcy case applies to co-debtors, as well as the debtor claiming bankruptcy protection, where the debt at issue is “consumer debt.” Consumer debt includes all debt incurred for a personal, familial, or household purpose.

Automatic stay applies to those who have filed for Chapter 7 bankruptcy or filed for Chapter 13 bankruptcy. The injunction prohibits banks or creditors from:

• Beginning court proceedings against you
• Calling to collect money
• Attempting to collect property
• Foreclosure sales

Automatic stay is a special right given to all those who have declared bankruptcy. It helps debtors become free financially by prohibiting further contact from creditors. If you would like to learn more about the advantages of automatic stay, contact a Maryland and Washington DC bankruptcy lawyer today.

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