The Automatic Stay is one of the most powerful tools in bankruptcy.
In most situations, the actual filing of the bankruptcy case itself automatically stays collection and other actions against the debtor, the debtor’s property, and codebtors. This means that by simply filing a Chapter 7 or Chapter 13 Bankruptcy we can immediately stops foreclosures, garnishments, lawsuits, and any other collection activity.
Your creditors are all mailed a notice making them aware that they cannot take the following actions against you:
- “Prohibited collection actions against the debtor and certain codebtors are listed in Bankruptcy Code §§ 362 and §§1301. Common examples of prohibited actions include contacting the debtor by telephone, mail or otherwise to demand repayment; taking actions to collect money or obtain property from the debtor; repossessing the debtor’s property; starting or continuing lawsuits or foreclosures; and garnishing or deducting from the debtor’s wages.”
If your creditors ignore the automatic stay, they can be penalized and liable for damages to you!
We use the Automatic Stay in a Chapter 13 bankruptcy to save our clients homes from foreclosure, to save a car that had been repossessed, and to simply help our clients get back on their feet.
It is important to note that under certain circumstances, the automatic stay may be limited to 30 days or not exist at all, although the debtor can request the court to extend or impose a stay.
Peter Behrmann is a Michigan bankruptcy attorney. From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.
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