When you file for personal bankruptcy protection, an automatic stay will immediately go into effect. The stay prevents your creditors from attempting to collect a debt through any means outside of the bankruptcy proceeding. Once your creditors have received notice of the bankruptcy filing (notice is a party of the process), they must stop calling, writing or communicating in any other fashion directly with you in an effort to collect the debt. Furthermore, if they have seized property that has not been sold, they must return it.
The bankruptcy laws provide for sanctions if a creditor “willfully or intentionally” engages in acts that violate the stay. Those sanctions can include costs and attorneys fees related to any proceedings resulting from the violation, as well as punitive damages, at the discretion of the court.
The automatic stay will remain in effect until your bankruptcy is closed. That will include the entire 3-to-5-year period of a Chapter 13 reorganization. A creditor may, however, petition the court to have the stay removed. As a general rule, the court will only grant such a request if you have engaged in bankruptcy fraud or there is concern that collateral may be destroyed or damaged.
At the office of Howard N. Sobel, we provide personal bankruptcy counsel to men and women throughout the state of New Jersey. Contact our office online or call us at 856-424-6400 to set up a free initial consultation. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.
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