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What is an Automatic Stay in Bankruptcy?

What is an Automatic Stay in Bankruptcy?

An automatic stay is a provision in bankruptcy that stops creditors and debt collectors from pursuing further legal action during your bankruptcy proceeding. Although filing for bankruptcy can shield you from creditors, there are some instances in which a creditor may seek to have your automatic stay lifted. Here’s how to protect yourself.

When Can an Automatic Stay Be Lifted?

A creditor may request the court to lift an automatic stay in the following situations:

  • Delinquent on mortgage payments
  • Delinquent on car payments
  • Failure to maintain insurance on your home or car
  • You have filed for Chapter 13 and you have not upheld the repayment plan arrangements

If you are being threatened with a lift in an automatic stay, it’s imperative to consult your bankruptcy attorney immediately to learn about your options and how you may be able to stop it.

Unsecured Debt

If you are filing for Chapter 7 bankruptcy and are discharging unsecured debt, typically creditors won’t file a motion to lift an automatic stay. However, if the unsecured debt will not be discharged in your Chapter 7 bankruptcy proceedings then a creditor may have the right to pursue a lift in an automatic stay.

How a Bankruptcy Lawyer Can Help

Filing for bankruptcy can be a complicated feat, especially if you are not familiar with the law. If your creditors have filed a motion to lift an automatic stay, don’t leave yourself at a disadvantage. Consulting an attorney can help you understand the process, advise you of your rights, and help protect your interests.

If you are up against mounting debt and are struggling to make ends meet, we can help.

Contact Moore & Associates, LLC at (913) 225-8330 to learn more about our no cash upfront options and how bankruptcy may be the right choice for you. Together we will discuss your concerns and guide you in the right direction to financial freedom.

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