If you feel that creditors have a stranglehold on you, bankruptcy can be a way of getting breathing room from that debt and creating a new beginning. That’s because once you file a petition for bankruptcy, the protection of an automatic stay is triggered, and your creditors are required to stop their efforts to collect their bills.

If you are considering bankruptcy, contact us today for a free consultation.

What the automatic stay does

The automatic stay operates as a restraining order that forbids creditors from pursuing collection actions against you until such time as your bankruptcy case has been decided. They can’t phone you, send you letters or emails or knock on your door. Any and all collection efforts must stop.

Creditors’ lawsuits

If a creditor filed a lawsuit against you before you filed for bankruptcy, the automatic stay stops that lawsuit dead in its tracks. That creditor must pursue the debt through the bankruptcy court rather than through the local county court. The general rule is that if even the lawsuit was taken to judgment, the bankruptcy court has the authority to discharge that debt.

Wage and bank garnishments

If a money judgment has been taken against you, and your wages are being garnished, the automatic stay can stop all garnishments unless they’re for child support or alimony obligations. Stopping wage garnishments can operate to open up sums of money that wouldn’t otherwise be available for supporting your family. Not only does the automatic stay operate to stop wage garnishments, it also stops garnishments of your checking or savings accounts.

Foreclosures and evictions

If foreclosure proceedings haven’t been filed against you, the automatic stay can prevent your mortgage lender from filing them. If foreclosure proceedings have been filed, the automatic stay can stop further foreclosure proceedings so long as the home hasn’t gone to sheriff’s sale. If you’re a renter, the same stay of proceedings will apply to an eviction so long as the landlord hasn’t taken a judgment for possession of the rental unit against you. You’re probably not going to live there for free for very long though. Upon the filing of a proper petition and notice, courts frequently allow the landlord to proceed against renters. Other reasons for an eviction might also exist though that are outside of the scope of any bankruptcy protection. Collection efforts on any money judgment rendered in an eviction must be halted.

The “repo” man

An automatic stay will halt a vehicle or other personal property repossession so long as the vehicle or other property hasn’t been sold. Those debts will be included in the bankruptcy.

Lifting a stay

There are situations where the automatic stay can be lifted, but that can only be done with due notice and a written motion. If a judge lifts a stay as to a particular creditor, that creditor can pursue or continue with any collection efforts that it deems necessary.

Contact a Los Angeles Bankruptcy Lawyer – We’re here to help you

Time is critical when filing bankruptcy. We’re not here to judge you. We’re here to help you on your bankruptcy. A frank and sincere discussion with a knowledgeable and experienced Los Angeles bankruptcy attorney from our law firm will help you decide when and how your financial situation will be handled. We’ll give you all of your options, so you can make the best decision for your future. Contact us for a free consultation. You can get your life started in a new direction.

Additional Resource