The automatic stay is a provision of the American bankruptcy law that prohibits your creditors from calling, writing, threatening, or pursuing legal action or taking any other measures outside of the bankruptcy proceeding to try to collect a debt from you. The automatic stay goes into effect the moment your bankruptcy petition is filed and remains in effect until your bankruptcy is complete. With a Chapter 7 bankruptcy, that means until the court officially closes your case. Under Chapter 13, the stay extends for the three-to-five-year period of repayment.
The automatic stay prevents any communications or other efforts related to an attempt to collect a debt. It also prevents a creditor from perfecting or enforcing a lien on property or attempting to repossess collateral. Some types of debts, however, are not suspended by the automatic stay, including child support payments, IRS tax arrearages, and pension loans. In addition, a debtor may have a limited stay or no stay at all on attempts to foreclose on real property if there’s been one or more bankruptcy cases dismissed in the previous year.
A creditor can ask the court to lift the automatic stay if you engage in certain prohibited acts:
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 (on selected cases). 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.
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