Florence Bankruptcy Lawyers Present Automatic Stay Information

In Credit Repair of CreditGuru (August 29, 2009 10:37 pm)

Besides the obvious relief of discharged debt, bankruptcy can offer other benefits even before the bankruptcy is final and any eligible debt has been discharged.  The automatic stay is one of those benefits.  Bankruptcy lawyers in Florence have the forms and knowledge to file your bankruptcy petition as soon as possible.

The automatic stay is issued as soon as the bankruptcy court has your completed petition recorded.  This action immediately, but temporarily, stops any lawsuits, evictions, foreclosures, actions because of child support or alimony delinquencies, wage garnishments or government actions because of tax issues.  The stay can likewise halt efforts to disconnect utilities and can stop your loss of employment if that potential loss is related to wage garnishment.   The stay is temporary, though.  All of the actions it “stays” or stops, may not be discharged by the bankruptcy.  It does, however, give you some room to breathe while the court and bankruptcy attorneys in Florence sort out your case. 

Specifically, here’s what the automatic stay can do:

•    Prevents the loss of utilities for at least 20 days.
•    Temporarily halts foreclosure proceedings on your house.
•    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 seizing property.

While this might seem like the light at the end of the tunnel, there are some things the automatic stay CANNOT do:

•    Cannot stop the IRS from auditing you, requiring a back tax filing, issuing a tax assessment or demanding payment of an assessment.
•    Cannot stop a paternity test or modification 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 two components and the debt part of the charge will be stayed.
•    Cannot stop monies being withheld from your salary to repay particular loans from pension funds

Creditors can get around the automatic stay if the court grants them permission.  The creditor may appeal to the court to lift the stay if he or she can prove it is not serving its intended purpose.  For example, if you are facing foreclosure on your house, you have no equity in the house, can’t pay the arrearages and have no visible means of keeping the house, the court is very likely to grant the creditor’s request to lift the stay and he or she can proceed with foreclosure.  Florence bankruptcy lawyers can usually counsel you ahead of time which creditors may pursue this avenue.

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