When a person files for Chapter 7 or Chapter 13
bankruptcy, they are afforded relief from creditor communications and collection
efforts through a court injunction known as an “automatic stay.”
An automatic stay can provide individuals with protection against bill
collectors, allowing them much needed breathing room to reorganize their finances.
An automatic stay can protect against the following debt-related emergencies:
Utility disconnections: If you are behind on your gas, water, electric, or telephone bill, an
automatic stay can delay their disconnection for a minimum of 20 days.
Eviction: An automatic stay can halt eviction proceedings unless your landlord
already has a judgment of possession against you at the time you file
for bankruptcy. Automatic stay can also be overridden if your landlord
alleges that you have been endangering the property or using illicit drugs
on its premises.
Foreclosure: Bank foreclosures are also stopped by automatic stay, but only temporarily.
If you are facing a foreclosure, Chapter 13 bankruptcy will be the best
remedy that will allow you to keep your house, whereas Chapter 7 bankruptcy
will likely result in the forced selling of your home to satisfy your
Collection of overpaid public benefits: If you were overpaid public benefits, an automatic stay will prevent
the agency from collecting this overpayment out of your future checks.
It is important to note, however, that the agency still maintains the
right to deny or terminate your benefits in the event that you should
With that being said, there are certain things that an automatic stay cannot
prevent. An automatic stay cannot prevent you from being audited or contacted
by the IRS for unpaid tax debts, though it will protect you against tax
liens or wage garnishments. Unpaid child support or alimony obligations
are also unaffected by automatic stay. In the event that you should be
facing criminal charges such as fraud over your debts, criminal proceedings
will still commence.
Can Creditors Get Around an Automatic Stay?
In certain circumstances, creditors can petition with the bankruptcy court
to lift an automatic stay or grant them an exception to the injunction
if it is not serving its intended purpose or if it jeopardizes the creditor’s
interest in certain property. For example, if you were to file for bankruptcy
the day before your house was to be sold in foreclosure and you have no
reasonable means of keeping your property, the courts would likely grant
the bank an exemption from the automatic stay.
If you are struggling with credit cards or medical debt, the
New York Debt Lawyers at the Law Office of Simon Goldenberg, PLLC can guide you through your
options. Filing for
bankruptcy in brooklyn could help get you on the road towards a debt-free future. Having earned
a Superb Avvo Rating and a three-time
Super Lawyers® for our unmatched advocacy, we have what it takes to get you through this
Call (888) 301-0584 or
schedule a free consultation today to review your legal options.
Our law firm assists with filing for Bankruptcy in the 5 boroughs of NYC
as well as Nassau County. Our New York City and Long Island offices are
located in Brooklyn, Manhattan, and Great Neck, NY. Call for a free consultation
to learn if you qualify.