Whether you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, the court will issue what is called an “automatic stay.” Put simply, this order halts the collection efforts of most of your creditors. For many, this comes as a significant relief, and it allows them the time and attention to better put their financial affairs in order.
But the automatic stay is not permanent, and it will sometimes be lifted at the request of your creditors. The automatic stay can also be used to delay foreclosure. It can be a useful tool or it can delay the inevitable, but with the help of a bankruptcy attorney who knows how to navigate the bankruptcy system, you can use it to your benefit.
Here, we at Groce & DeArmon, P.C. take a minute to discuss how the automatic stay works, how it can help you, and what debts are not halted by it.
What the Automatic Stay Will Cover
As we mentioned before, the automatic stay will cover most of your outstanding debts, but it will not halt all of them. Debts that will be halted include bills such as utility and unsecured credit cards, garnished wages, and back mortgage payments that may be taking you toward foreclosure.
The automatic stay will also halt any lawsuits or back payments on child support. For some people, this immediate halt can make declaring bankruptcy a viable option for escaping crushing debt. If this sounds like something you need, don’t hesitate to seek a free consultation with a bankruptcy attorney from Groce & DeArmon.
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How The Automatic Stay Can Be Lifted
Your creditors can simply ask that the automatic stay be lifted. The court will consider their reasons for making the request and make a judgment based on their considerations. This is more likely to happen in a case where someone’s house is already up for foreclosure. If you start the bankruptcy proceedings after you have already been notified of foreclosure, then it is likely that the court will lift the automatic stay so that the foreclosure proceedings can commence. If you’re worried about any of your creditors seeking to have the stay lifted, call a bankruptcy attorney from our firm to discuss your options.
What The Automatic Stay Won’t Cover
If you are in trouble for something unrelated, like a criminal offense, some of your debts will not be covered. Lawsuits that seek to acquire child support or alimony payments will not be halted. Missing or unpaid taxes will also not be covered, meaning the IRS will still be after you. However, they will not be able to take possession of your property or assets.
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Get Help from a Bankruptcy Attorney at Groce & DeArmon, P.C.
If you are considering bankruptcy and you are concerned about being covered by the automatic stay, contact Groce & DeArmon, P.C. With over 13 years of experience serving the Southwest Missouri area, our bankruptcy attorneys will be able to help you navigate the difficult terrain of bankruptcy filings. To set up a free consultation, you can reach our office at 1-800-640-3706.