Automatic stay is one of the most important provisions of bankruptcy law. It provides relief from overwhelming debt among other benefits. We will explore how automatic stay works, its advantages, and other important information you should be aware of if you’re planning to get a fresh start.

Keep reading to find answers to your questions about automatic stay before hiring bankruptcy attorneys in La Mesa to handle your case.

What is automatic stay?

Automatic stay is a court-ordered injunction that prevents creditors from taking any action to collect debts once you file a bankruptcy petition. It protects debtors as it gives them a chance to reorganize their finances and get a fresh start without the constant pressure of creditors.

How does automatic stay work?

When you file for bankruptcy, the court issues the automatic stay. This will stop any collection activities from creditors and prevent them from taking any further action against you.

What creditor actions are affected by automatic stay?

This provision prevents creditors from contacting you – such as calling, writing, or harassing you in any other way. It also prevents creditors from garnishing wages, repossessing assets, freezing funds in bank accounts, or continuing on with any legal action against you, including lawsuits.

What if a creditor keeps contacting the debtor?

If a creditor continues to contact you, you should inform your bankruptcy attorney right away. They can contact the creditor and remind them of the automatic stay and advise them to cease all collection activities immediately. If the creditor continues to harass you, you can file a motion for contempt with the court in order to seek sanctions against them for violating the automatic stay.

Can a creditor stop automatic stay?

While it’s an automatic injunction, creditors may try to remove the automatic stay by filing a petition with the court. The court may grant the motion to stop the automatic stay in certain cases, but this rarely happens as it usually rules in favor of the debtor.

Does automatic stay stop collection of all debts?

The automatic stay doesn’t stop creditors from continuing to attempt to collect debts that are not affected by it, such as taxes, alimony, child support, and student loans. It’s essential to consult with a bankruptcy lawyer to understand what types of debt are affected by the automatic stay and which are not.

How long does automatic stay last?

The automatic stay will remain in effect until the bankruptcy case has been discharged or dismissed. However, the court may extend it in certain cases. Its duration also varies depending on the Chapter you choose. For example, in a Chapter 13 the automatic stay lasts the entire time you are in your payment plan, while in a Chapter 7, the automatic stay ends when you receive your discharge.

Where can you find reputable bankruptcy attorneys in La Mesa and beyond?

If you are considering filing for bankruptcy, it is important to hire experienced and knowledgeable bankruptcy lawyers who can help you get the debt relief you need, such as our team at Chang & Diamond.

We have the expertise to guide you through the process and provide you with the best options for your specific situation, for example, filing a joint petition with your spouse. We’ll help you understand the benefits of this and other options and answer all your questions about bankruptcy throughout the proceedings.

Our team will work with you to create a tailored plan, provide expert legal representation, and assist you in regaining your financial independence. Whether you’re in La Mesa or across San Diego County, get in touch with us today and book a free consultation!