A retail company with stores in 49 states filed for bankruptcy under Chapter 11, putting several lawsuits against the chain on hold. The company owed some $122 million on a loan to a bank and had claims against it from three lawsuits. Each of the lawsuits were put on hold during the bankruptcy. The retailer under the terms of the bankruptcy agreed to pay $11 million to a venture capital firm, to sell 10 stores and for the venture capital firm to assume the three claims against the retailer.
One of the lawsuits on hold was a $100,000 case in which a man tripped in a third level parking unit and fell in a hole. He sustained broken bones and sprains. The second case involves a woman who says she fell in a store parking unit and had a severe arm injury. The final lawsuit involved a large display poster that fell on a woman’s head and shoulders while she was shopping and caused head, neck, teeth and jaw injuries.
Bankruptcy Automatic Stay
When an individual files for bankruptcy, the filer is granted a condition called an automatic stay that immediately puts to a halt any collection efforts by creditors. This can be quite beneficial to those who face mounting credit card bills and the impending doom of being foreclosed upon and the inability to pay child support. Some of the things that an automatic stay does include:
• Stopping foreclosure proceedings until after bankruptcy
• Stopping utility disconnection notices
• Stopping eviction proceedings until after bankruptcy
• Stopping wage garnishments
There are certain things, however, that the bankruptcy automatic stay cannot stop. It cannot give you immunity from any IRS hearings or audits. It cannot protect you from criminal trials. And it cannot stop any lawsuits regarding child support.
Legal Creditor Actions
When an automatic stay is enacted, some creditors do find ways to get around the rule. Some creditors will specifically ask the bankruptcy court to lift the automatic stay. This might happen if you file for bankruptcy the very week that your house is to be sold in a foreclosure. It is quite possible that a creditor in certain cases is granted immunity from the automatic stay.
A qualified bankruptcy attorney can assist those with mounting debts to navigate through the bankruptcy process. An experienced bankruptcy lawyer works with bankruptcy courts on a weekly or daily basis and knows what needs to be done to get your bankruptcy goals accomplished.
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