FILING BANKRUPTCY STOPS COLLECTION ACTIVITIES
In addition to discharging consumer and business debt, one of the central advantages to filing bankruptcy is obtaining the benefit of the automatic stay. Under 11 U.S.C. § 362, this protection arises as soon as a bankruptcy Petition is filed. The automatic stay prevents or stops:
- All creditor collection activities
- Wage garnishments
- Foreclosure proceedings
- Bank executions, garnishments, levies and foreclosures.
The automatic stay means that a creditor is stopped from suing you, foreclosing on your property, and removing funds from your bank account to satisfy a Judgment.
EXCEPTIONS TO THE AUTOMATIC STAY
While the automatic stay confers immediate relief upon the filing of a bankruptcy Petition, in certain instances, it is not indefinite or absolute. A creditor can take certain steps to limit or restrict the automatic stay. They can file Motions for Relief from Stay or Motions for In rem relief. In addition, if a previous bankruptcy case filed by the same debtor was dismissed within the preceding year, the stay arising upon the filing of the second case is restricted to only 30 days. If there are two or more bankruptcy cases dismissed within the preceding year, however, the automatic stay does not arise at all, meaning that a creditor is not prohibited from taking any actions against the debtor.
EXTENDING THE AUTOMATIC STAY
In circumstances where a previous bankruptcy case was dismissed within the year and the automatic stay is limited to only 30 days, it is often possible to file a Motion to Extend the Automatic Stay.
CONNECTICUT BANKRUPTCY LAW FIRM
Take advantage of our free case evaluation to learn more about how filing for Chapter 7 bankruptcy today can help you get a fresh start tomorrow. From our Hartford area offices, we assist consumers in Hartford, Putnam, Tolland and New London counties with filing bankruptcy Contact us at 866-790-5970 or visit our contact form page. In many instances, we will return your call the same day.