One bit of peace of mind my bankruptcy clients welcome as much as a fresh financial start is the Automatic Stay. Immediately upon Wynn at Law’s filing of your bankruptcy, creditors generally cannot continue the collection process. It’s quiet time at dinner time since the persistent calls usually come to a screeching halt. When you file, Attorney Shannon Wynn becomes the contact person for the creditor.
The stay halts all attempts by creditors to collect your debts, including existing wage garnishments, lawsuits, and car repossessions. And of course the calls and letters.
Not all debts are subject to this provision. For example, child support orders and arrears are not stayed and the state can continue to attempt collection. Also, if a creditor believes he or she has sufficient grounds to continue, the creditor may petition the court to lift the Automatic Stay. Rare, but it happens.
It isn’t to imply they won’t get a share of your assets. Their share is a proportion. To simplify it, let’s say one third of your debt is owed one creditor: Then one third of your assets are owed them. Not more if they keep after you with more letters and calls. Once the automatic stay is in effect, that creditor is likely to receive less than the full amount they are owed if anything at all. Plus, creditors know you can file suit against THEM if they continue to try to collect after a bankruptcy filing. That, too, is rare, but it happens.
When isn’t there an Automatic Stay? If you’ve had Wynn at Law, LLC or another firm file a bankruptcy for you in the prior year, you may not get the Automatic Stay. With residential leases, a landlord can continue an eviction if they already obtained a judgment. Even after the bankruptcy filing, a landlord could start an eviction if he or she can demonstrate that the home/condo/apartment is being damaged.
*The content and material in this original post is for informational purposes only and does not constitute legal advice.Photo: Sonar. Used with permission.