Bankruptcy Won’t Stop All Legal Proceedings
If you’re struggling to make ends meet, a personal bankruptcy filing can help you get a fresh start. When you file for bankruptcy protection, an automatic stay immediately goes into effect. This stay prevents creditors from harassing you by phone, sending threatening letters, or taking legal action to collect the debt except through bankruptcy proceedings. However, a bankruptcy petition won’t suspend all legal proceedings to which you may be a party. Here are some of the legal actions that aren’t affected by personal bankruptcy:
Most other types of debt can be discharged, including the following:
- Actions to enforce a lien on property—The automatic stay applies only to the collection of the underlying debt. It has no impact on any liens on collateral pledged as security for a loan. Accordingly, if you are in breach of your payment agreement, and one of the permissible remedies is execution of the lien, your creditor may seek to repossess the property without hindrance from the automatic stay
- Criminal prosecutions—In most instances, bankruptcy has no effect on criminal proceedings, such as claims for restitution or embezzlement. There are just two exceptions—if you have been overpaid certain government benefits or you have a debt that arose out of damage to government property.
- Most family law matters—You may not discharge support obligations in bankruptcy and the automatic stay can’t be used to avoid making those payments or suspend collection efforts for child support or alimony.
Contact Attorney Howard N. Sobel
At the office of Howard N. Sobel, we work closely with people in New Jersey in personal bankruptcy filings. Contact our office online or call us at 856-424-6400 to set up a free initial consultation. We are currently available by phone, text message, or videoconference only. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.