Bankruptcy stay which is also known as Automatic stay serves as a lifesaver. How? The moment you file for bankruptcy, this order immediately takes in action which protects you and your property and prevents actions that are made by creditors, collection agency or any government unit such as collection of debts, fees or notices. Creditors can be very harassing and the stay is a powerful tool that gives an immediate relief to the debtor, thus a lifesaver.
Here are several things that bankruptcy stay can do for you in your financial situation:
–stops your utilities from disconnection
If you are behind your utility bill, the utility company which is concerned threatens you that they disconnect your telephone, electric and water service. The stay often prevents the utility company from turning off these services for at least 20 days.
–stops foreclosure proceeding
If the bank that holds your home mortgage is starting foreclosure proceeding, the stay temporarily stops the said proceedings. If you want to keep your house, you should file Chapter 13 bankruptcy instead of Chapter 7.
If you are evicted from your home or your landlord is trying to evict you, the bankruptcy stay may provide some help. However, because of the recent changes to the bankruptcy law made it easier for your landlord to proceed with the eviction. If your landlord can show that you are misusing the property then the court will side with the landlord.
–stops a government unit from collection of overpayments of public benefits
If you receive public benefits before you filed bankruptcy, the stay will prevent agency from collecting any benefits until the automatic stay is lifted. However, if you are not qualified for the benefits, the stay will not prevent the agency from ending the benefits for that reason.
–stops multiple wage garnishment
IIf you file bankruptcy, the stay stops all wage garnishment until the stay is lifted. Filing bankruptcy would allow you to take home your entire salary.
It is important to know that there are also situations and instances wherein the stay will not help you:
–few tax proceedings
–family and child support
–loans from pension; and
–filing of bankruptcy for multiple times
Most of the time, a creditor may appeal the court to lift the bankruptcy stay. Lifting the stay is a powerful tool used by the creditors for them to take actions for collection. In order for them to do so, they must need to show that the stay is not serving its intended purpose. There are four forms of relief from stay: termination, annulment, modification and condition.
If a creditor violates the stay, a debtor can request the court to recover the damages. The debtor must show to the court the wilful actions of the creditors and any actual injuries made. Thus, when a creditor wilfully violates the bankruptcy stay, the debtor may recover for the damages that are made to, including costs and attorneyfs fees. So, if you are facing problems like the ones mention above, contact a Spokane Valley Bankruptcy Attorney immediately.