When you file for bankruptcy, an automatic stay goes into effect that bars most creditors from taking collection actions against you while your bankruptcy case is pending. It is important to note that if you have had one or more bankruptcy cases pending and dismissed within the past year, the stay may be limited to 30 days or not take effect at all. In those situations, a qualified Washington DC and Maryland bankruptcy attorney can assist you with filing a motion to impose or extend the stay.
Automatic Stay Protection
The automatic stay prohibits most creditors from engaging in collection activities while your bankruptcy case is pending, including:
- Starting or continuing foreclosure proceedings
- Repossessing or seizing property
- Garnishing wages or bank accounts
- Filing or continuing lawsuits
- Enforcing a judgment
- Perfecting a lien
- Attempting to collect a debt through any means, including phone calls, emails and collection letters
The automatic stay may also offer limited protections against eviction and utility shutoff. When you receive a Chapter 7 or Chapter 13 discharge, a permanent injunction replaces the stay. An experienced Maryland and Washington DC bankruptcy attorney can explain your rights under bankruptcy law, including the benefits and limitations of the automatic stay.
Limitations of the Automatic Stay
The automatic stay does not stop all lawsuits or collection efforts. Below are some exceptions:
- Criminal proceedings
- Lawsuits regarding alimony or child support
- IRS audits, requests for tax returns and assessment of taxes
- Payroll deductions for repayment of retirement loans
Additionally, creditors can file a motion seeking to modify or lift the stay in order to proceed with actions like foreclosure or repossession. A Washington DC and Maryland bankruptcy lawyer can help you resolve these motions with your best interests at heart.
Violations of the Automatic Stay
Unless a creditor obtains court permission to proceed with collection efforts, any attempt to collect a debt may constitute a violation of the automatic stay. If a creditor keeps calling you, sends you threatening letters or takes any other collection actions against you, the bankruptcy court may impose sanctions against the creditor.
If a creditor contacts you during bankruptcy, you should make sure the creditor has your bankruptcy case information and your attorney’s name and phone number. If the creditor continues to harass you, you should:
- Notify your attorney about the issue, providing information such as the creditor’s name and phone number, copies of any emails or letters you have received, and dates and frequency of phone calls
- Notify the bankruptcy court, if you do not have an attorney
A dedicated Maryland and Washington DC bankruptcy lawyer can assist you with all aspects of bankruptcy, including creditor harassment issues should they arise.
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