There are many benefits that come with filing for bankruptcy when collection calls become overwhelming. While objectives like discharging your debts can take time, other benefits take effect the moment you file. The most common example of this is the automatic bankruptcy stay.
Automatic stays in Miami bankruptcies go into effect immediately, and they bar your creditors from any attempt to collect your debt. However, there are some situations where it is possible for them to get around the stay or end it entirely. Let our dedicated bankruptcy attorneys at Werner, Hoffman, Greig & Garcia answer your questions about this key protection.
The automatic stay is one of the most powerful protections available in a Miami bankruptcy case. It is a court-ordered freeze on most collection actions, and it goes into effect the moment you file your bankruptcy petition.
As soon as the bankruptcy is filed, creditors must stop all efforts to collect on debts, including phone calls, letters, lawsuits, wage garnishments, utility shutoffs, and even pending foreclosure sales. It applies to both secured and unsecured debts, providing you some breathing room while the bankruptcy process moves forward.
The purpose of the automatic stay is to protect the debtor from aggressive collection tactics and to give the bankruptcy court time to evaluate your financial situation. It allows individuals to regroup, ultimately moving forward with a plan to handle their debts in a court-supervised process. There are serious consequences that can follow a creditor if they violate the stay.
In some Miami bankruptcy cases, the automatic stay does not go into effect immediately, particularly when a debtor has filed multiple bankruptcies in a short period. If a person files a second bankruptcy within one year of a prior case being dismissed, the automatic stay will only last 30 days unless the debtor obtains a court order extending it. If there were two or more dismissals within the past year, the stay does not go into effect at all. In this situation, a debtor would need to file a motion with the court seeking a bankruptcy state and prove they are acting in good faith.
Even if the stay goes into effect, there are situations where creditors and government entities could avoid it. This could happen because of certain exceptions in federal law, or it could result from a creditor’s motion for relief from the automatic stay.
There are exceptions in federal law that apply to certain kinds of debts, including tax and child support obligations. The filing of a bankruptcy case will not disrupt the collection of these debts.
Creditors can also ask the court for relief from the automatic stay. If these orders are granted, they are allowed to continue collection efforts for the specific obligations mentioned in the order. Typically, these motions are granted in cases where a lender is seeking to foreclose on a mortgage or repossess a vehicle. If the debtor does not plan to get caught up using the bankruptcy system on these obligations, the court will usually grant this relief.
If you are considering bankruptcy, there are a lot of factors to take into account. While this process can be difficult to manage, there are also major benefits that come with it. One of them is the automatic stay, so you can get immediate relief from hounding creditors. At Werner, Hoffman, Greig & Garcia, we understand how to use this stay to help you get the fresh start you deserve. Reach out today for a confidential consultation.
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