Automatic Stay No Longer Automatic

The automatic stay provision of the bankruptcy code provides protection for petitioners against ongoing legal proceeding by creditors. Upon the court acceptance of your bankruptcy petition, your creditors are prohibited from any attempts to collect on some types outstanding debts.

Prior to the enactment of the new bankruptcy law, the Automatic Stay provision immediately terminated practically all legal and financial actions against you. This provision was modified and certain categories of legal or civil actions are no longer suspended by filing for bankruptcy.

The Automatic Stay will not stop:

  • Child support
  • Alimony
  • Paternity suits
  • Evictions from residential rental property
  • Suspension of driver's licenses
  • Suspension of professional licenses
  • Victim's compensation payments
  • Criminal restitution payments
  • Court imposed fines for civil or criminal violations
  • Any financial actions or proceedings against you as a result of fraud or criminal intent

 

The Automatic Stay will stop: (Excluding the items listed above)

  • IRS tax levies
  • IRS seizures
  • Wage garnishments
  • Collection of overpayments of benefits from a governmental agency
  • Repossessions
  • Seizures of property (Foreclosures)
  • Disconnection of Utilities (water, gas, electricity)

The Automatic Stay may only provide a temporary solution. Various stipulations apply for the categories that an Automatic Stay will stop. You should consult with a bankruptcy attorney inyour specific area for more details.

With the exceptions noted, the Automatic Stay provision of the bankruptcy law will providelegal protection until one of the follow occurs:

  • Your case is dismissed
  • Your case is discharged
  • A creditor request a bankruptcy judge to lift the stay
  • You no longer choose to include or protect certain assets in your bankruptcy

 

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