Automatic Stay in Chapter 7 Bankruptcy: What Is and Is Not Stopped

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Apr 26, 2012 -
You may have a lot of questions about what happens after bankruptcy. Worries about lawsuits being filed to collect debt may plague you. Some of the more common bankruptcy questions pertain to unemployment benefits, utility services, foreclosures or evictions, loans, taxes, and child support.

To learn more about your rights and how the automatic stay may impact your bankruptcy case, you would benefit from speaking to an attorney who handles this area of the law. There may be Texas bankruptcy exemptions that you aren’t aware of.

Automatic Stay in a Chapter 7 Bankruptcy: What Is Stopped?

An automatic stay can help prevent others from bringing a lawsuit against you when filing for chapter 7 bankruptcy. There may be an attempt to collect payments owed.

Not everything can be stopped in an automatic stay; however, some of the more common emergencies that bankruptcy clients may experience are often stopped.

For instance, if you receive unemployment benefits and were overpaid, the automatic stay can prevent the collection of these funds. The only thing it can’t help with is if you are denied benefits or they are terminated because you are found to be ineligible.

Another emergency that is stopped under automatic stay is when you are facing a disconnection of utility services such as electric, gas, water, and telephone. An automatic stay generally prevents it from happening for at least 20 days.

If you face eviction or a foreclosure, the automatic stay can help. With an eviction, there is still the potential that you ultimately could lose. For instance, if there is already a judgment against you, it may not be stopped. On the other hand, you may be able to stop eviction proceedings for several days or weeks.

In a foreclosure, proceedings will be stopped temporarily. At some point you still could lose your house, but this at least buys you some time.

Finally, your automatic stay can help stop your wages from being garnished due to alimony and/or child support to restore your salary back to its full amount.

Automatic Stay in a Chapter 7 Bankruptcy: What Is Not Stopped?

There are some things that aren’t stopped in an automatic stay. For instance, if you have a loan from a pension, you may find those payments automatically taken from your wages.

Or if you owe taxes, a lien can still be placed against you. You may find your wages or property are eligible to be seized.

Other things that may not be stopped in an automatic stay include previous bankruptcy filings, monies owed from criminal proceedings, and lawsuits pertaining to alimony or child support.

Keep in mind that even with those things that are generally stopped in an automatic stay, creditors may be able to circumvent it. They can request that the stay be lifted, depending on the specific circumstances.

The best way to learn about your rights and how your debts are impacted by a chapter 7 bankruptcy is to seek legal counsel. An attorney, at Warren & Migliaccio, who handles these types of cases, can explain what happens after bankruptcy and answer common bankruptcy questions. Call 1-888-584-9614.

Visit us at: http://wmtxlaw.com/