Phoenix Automatic Stay Attorney
Legal Help for Protection Against Creditor Harassment in Phoenix
An automatic stay is available to individuals who file for bankruptcy. It can provide protection against wage garnishment, bank account garnishment, repossession, foreclosure, and other debt collection actions by creditors. If you are considering bankruptcy, call our Phoenix bankruptcy attorneys to find out how an automatic stay can help you.
How Does an Automatic Stay Work?
When you file Chapter 7 or Chapter 13 bankruptcy, an automatic stay goes into place immediately. It acts as an injunction to stop creditors from enforcing liens or attempting to collect debts during bankruptcy proceedings. This can bring tremendous relief to debtors who have been subjected to persistent collection efforts bordering on harassment, such as phone calls several times a day, at home and at work, and threats of legal action.
What Protection Can an Automatic Stay Provide?
Once you file for bankruptcy and the automatic stay goes into effect, you have protection from the following debt collections actions:
- Foreclosure: If you miss two or more mortgage payments, the bank may begin moving toward foreclosure. An automatic stay stops foreclosure proceedings, but your mortgage lender will be able to proceed again once the stay is lifted. If you file Chapter 13, the automatic stay gives you more time to bring your mortgage payments current. You may also have the option to catch up on delinquent payments through a repayment plan lasting three to five years.
- Eviction: An automatic stay can delay or stop the process of eviction from your home. It will not have any effect if your landlord had a judgment against you before you filed for bankruptcy.
- Disconnection of utilities: If you are behind on your electric, gas, water, or telephone bills, an automatic stay can prevent your service from being disconnected for at least 20 days.
- Wage garnishment: In some cases, a creditor can take a portion of your paycheck until a debt is paid in full. An automatic stay can stop your wages from being garnished. However, bankruptcy will not discharge child support or alimony.
- Tax liens: An automatic stay can temporarily stop the IRS from issuing a tax lien or seizing income or property. If you owe taxes, they may be discharged in Chapter 7, or you may pay the debt in a Chapter 13 payment plan.
- Vehicle repossession: When you file for bankruptcy, the automatic stay will stop the lender from repossessing your vehicle. The lender may file a motion for relief from the automatic stay, asking the court to lift the stay so it can repossess your car.
What Happens When the Automatic Stay is Lifted?
In most cases, the automatic stay remains in effect until your bankruptcy proceedings are finalized and your debts are discharged by the court. However, creditors may get around the stay by asking the court to remove or lift it. Once they get a court order lifting the automatic stay, they can move forward with foreclosure or repossession. Creditors may file motions for relief from the automatic stay in both Chapter 7 and Chapter 13 bankruptcies. This is more common with Chapter 13, because creditors in Chapter 7 cases usually simply wait until the case is closed, at which time they can proceed with foreclosure or repossession for any debts not discharged in bankruptcy if debtors fail to make the required payments.
If you are overwhelmed with debt and the collection actions of creditors, filing for bankruptcy with an automatic stay may be your best option. Call the Hilltop Law firm at (602) 466-9631 and speak with an experienced Phoenix bankruptcy lawyer to determine if Chapter 7 or Chapter 13 bankruptcy is the right debt relief solution for you.