Mesa AZ Bankruptcy Attorneys Present the Automatic Stay

In Credit Repair of CreditGuru (September 30, 2009 7:41 am)

One of the best known and most appreciated benefits of bankruptcy is the “automatic stay”.  The automatic stay is an action made out by the bankruptcy court as soon as it records your bankruptcy petition filed by Mesa bankruptcy attorneys.  It is an immediate, but temporary, measure that stops harassment from creditors (including those nasty, endless phone calls), evictions, wage garnishments, foreclosures, legal actions due to alimony or child support and actions related to tax issues.  It also stops any actions to disconnect utilities and drafts on your bank accounts.  This stay is in effect until the bankruptcy court lifts it and it gives a debtor breathing room and time to reorganize his or her finances.  Keep in mind, however, that this measure is only temporary until the court has time to sort out your issues.  A number of the actions that are stayed will not be discharged in the bankruptcy and may continue after the bankruptcy is closed.

Mesa bankruptcy lawyers offer these specifics on what the automatic stay can do for you:

•    Prevents the loss of utilities for at least 20 days.
•    Temporarily halts foreclosure proceedings on your home.
•    Provides some help in an eviction.
•    Prevents the collection of overpayment of public benefits
•    Stops wage garnishments, even multiple ones.
•    Prevents the IRS from issuing a tax lien or taking over property

As mentioned above, the automatic stay cannot make all your problems go away.  Here are some things the automatic stay CAN’T do, not even temporarily:

•    Cannot stop the IRS from auditing you, demanding a back tax filing, issuing a tax assessment or demanding payment of an assessment.
•    Cannot stop a paternity test or adjustment of child support or alimony agreements.
•    Cannot stop criminal proceedings against you.  If the crime involves both a debt and a criminal element, it will be divided into the 2 components and the debt part of the charge will be stayed.
•    Cannot stop monies being withheld from your salary to repay certain loans from pension funds.

Despite its wide sweeping powers, the automatic stay is not entirely resistant to the efforts of creditors.  If they approach the court and state their case well enough, the bankruptcy court might, in some instances, lift the stay for certain actions.  If, for example, you are facing a foreclosure on your house and your lender can prove that you have no equity in your house, cannot make the payments, even after the bankruptcy or cannot pay off the arrearages, the court is very likely to lift the stay and allow the foreclosure to proceed.   Experienced bankruptcy lawyers from Mesa AZ can offer advice on your next steps.

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1 Comment »

  1. When I filed bankruptcy I was very thankful for the automatic stay. It gave me a little peace in my life during that very troubling time. I was able to focus more on the things that mattered and was able to get everything in order before I file Mesa bankruptcy.

    Comment by Archie Timmons — March 9, 2010 @ 9:13 pm

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