The Automatic Stay:  How Bankruptcy Stops Your Creditors

Indianapolis Bankruptcy Lawyer

Bankruptcy provides peace of mind for people. The automatic stay is the primary protection for the debtor offered by the U.S. Bankruptcy Code.

The filing of a bankruptcy case stops ALL collection efforts. Lawsuits must stop, garnishments must stop, hate mail must stop, foreclosures must stop, sheriff sales must stop, repossessions must stop, and telephone calls must stop.

Thus, the automatic stay provides peace of mind for those who file bankruptcy.

The automatic stay has penalties for those creditors that disregard it. If a debt collector or creditor violates the automatic stay by continuing to attempt to collect a debt after the bankruptcy has been filed, then the creditor or debt collector may face serious consequences.

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These consequences may include the finding of a contempt citation, punitive damages, attorneys’ fees, and actual damages. This office has recovered thousands of dollars in damages for our clients when creditors and debt collectors have violated the automatic stay of the U.S. Bankruptcy Court.

Additionally, the bankruptcy court may void certain actions. Thus, if a person files for bankruptcy before the sheriff sale occurs on his/her house but the sheriff’s department does not stop the sell of the house, then the debtor may have the sheriff sale voided because the filing of the bankruptcy stops ALL collection activities against the debtor and his/her property.

Garnishments must stop

Garnishments must stop. If a person files bankruptcy who has an active garnishment, then any garnished funds that occur AFTER the filing of the bankruptcy must be returned to the debtor. Be sure to alert the attorney if you have a garnishment that continues after the filing of the bankruptcy case.

Notice, Notice, Notice!!!

Providing notice of the pending bankruptcy is the key feature of the automatic stay. Typically, notice of the bankruptcy case is issued by the Bankruptcy Noticing Center which sends notice of the bankruptcy via electronic notices or via U.S. Mail.

However, a debtor may verbally notify a creditor or debt collector of the pending bankruptcy case. Regardless, the key feature to trigger the protection of the automatic stay is to provide notice to the debt collector or creditor.

In short, if a creditor or debt collector contacts you after the filing of your bankruptcy, contact our office immediately. Even if the debt collector simply leaves a voicemail message, contact our office immediately to enforce the automatic stay. You may be able to collect money from the creditor or debt collector’s violation of the automatic stay.

Why Call My Bankruptcy Firm

Unsure of whether or not bankruptcy is right for you? Want to see if you are eligible for bankruptcy? I am ready to discuss all your options with you in a free case evaluation. Find trusted, dedicated advice today at John Steinkamp & Associates.

I have helped 1,000s of people to a fresh start
My firm is backed by strong client recommendations
14+ years experience handling only bankruptcy cases
Affordable, hassle-free payment plans

Unsure of whether or not bankruptcy is right for you? Want to see if you are eligible for bankruptcy? I am ready to discuss all your options with you in a free case evaluation. Find trusted, dedicated advice today at John Steinkamp & Associates.

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