Wednesday, May 28, 2014

The power of the Automatic Stay in Bankruptcy

The main protection when a person files bankruptcy is known as the Automatic Stay. The automatic stay is essentially a giant STOP sign that prohibits nearly all collection action against the debtor or the debtor's property.

Whether you file Chapter 7 or Chapter 13 bankruptcy the automatic stay immediately goes into effect at the time of filing.

The automatic stay prohibits certain actions including collection calls, repossessions, ongoing garnishments, foreclosure sales and lawsuits.

Once the creditor has actual notice that a bankruptcy has been filed they are subject to the automatic stay. If a creditor violates the automatic stay they may be liable for damages. When a creditor violates the automatic stay, and fails to remedy the problem sometimes it is necessary to file an adversary proceeding against the creditor in bankruptcy Court. Our firm has successfully held creditors who violate the automatic stay liable for their actions.

For more bankruptcy information visit us at