Maricopa County Automatic Stay Lawyer
Talk to a Maricopa County bankruptcy lawyer at Hilltop Law firm about the benefits of an automatic stay. Call now at (602) 466-9631.
Automatic Stay Attorney Provides Bankruptcy Relief to Maricopa County Residents
Maricopa County is full of exciting activities to enjoy, such as kayaking in the Salt River, checking out the Dwarf Car Museum, or visiting the largest Hindu Temple in the state, Maha Ganapati Temple of Arizona. However, facing financial difficulties and considering bankruptcy is stressful and can rob you of joy.
Thankfully, understanding the available legal protections can provide much relief. One crucial safeguard in this process is the automatic stay, which is a legal provision that halts most collection activities the moment a bankruptcy petition is filed.
If you're thinking about filing for bankruptcy, contact Maricopa County bankruptcy attorney Cy Hainey at Hilltop Law Firm. For over 10 years, Cy has been helping Maricopa County residents overcome financial challenges. Our firm can help you find the right financial solution so you can get a fresh start.
Call (602) 466-9631 to schedule a FREE consultation today. We offer Zoom consultations using your computer, tablet, or cell phone, and we'll gladly help if you need assistance setting up your device.
What Is an Automatic Stay?
An automatic stay is a provision under the U.S. Bankruptcy Code that immediately stops creditors from pursuing collection efforts against a debtor who has filed for Chapter 7 or Chapter 13 bankruptcy. This legal mechanism offers instant relief from the stress and pressure of debt collection, allowing you the time and space needed to reorganize your finances.
The moment a bankruptcy petition is filed, the automatic stay takes effect, offering immediate relief to the debtor. This legal provision will immediately put an end to collection activities, such as phone calls, letters, lawsuits, wage garnishments, and foreclosures. An automatic stay also halts eviction proceedings and vehicle repossessions, giving you a chance to develop a viable plan for debt reorganization or liquidation.
Benefits of an Automatic Stay
An automatic stay will give you a chance to catch your breath while you work out bankruptcy arrangements with your lawyer. It provides the following types of relief:
- Foreclosure: When a debtor files for bankruptcy, the automatic stay immediately stops any ongoing foreclosure process, preventing the forced sale of the debtor's home. This pause provides you with valuable time to explore options for retaining your property. In a Chapter 13 bankruptcy, the debtor can use this period to catch up on missed mortgage payments through a court-approved repayment plan, potentially saving their home from foreclosure. In a Chapter 7 bankruptcy, the automatic stay offers temporary relief, giving the debtor time to negotiate with the lender or consider other housing arrangements.
- Eviction: An automatic stay can stop an eviction even if the landlord has already obtained a judgment for possession, offering the debtor a brief window to address overdue rental amounts or negotiate terms with the landlord. But it's important to note that the protection is not absolute. If the landlord has already obtained a judgment for possession before the bankruptcy filing, they can request the court to lift the automatic stay to proceed with the eviction. And if the eviction is based on illegal activity or endangerment, the stay may not apply.
- Wage Garnishment: The automatic stay stops most creditors from continuing wage garnishment, allowing debtors to receive their full paycheck. This can be a significant financial reprieve, offering the debtor more funds to manage essential expenses and begin the process of financial recovery. However, the automatic stay may not affect certain garnishments, such as those for child support or alimony.
- Vehicle Repossession: When a bankruptcy petition is filed, the automatic stay immediately halts repossession efforts by creditors. This stay ensures that the debtor can keep their vehicle, which is often essential for commuting to work, attending medical appointments, and managing daily life. In a Chapter 13 bankruptcy, you can include the car loan in your repayment plan, catching up on missed payments over time while retaining the vehicle. In a Chapter 7 bankruptcy, the automatic stay provides temporary relief, giving the debtor an opportunity to negotiate with the lender or explore options to redeem or reaffirm the car loan. Creditors may request that the stay is lifted to proceed with the repossession, but this requires court approval.
- Tax Liens: Upon filing for bankruptcy, the automatic stay halts efforts by tax authorities to place new liens on the debtor's property for unpaid taxes. This pause provides the debtor with a crucial opportunity to address their tax obligations without the immediate threat of additional liens. In a Chapter 13 bankruptcy, the debtor can include tax debts in their repayment plan, potentially discharging some unsecured tax debts and paying off others over time. In a Chapter 7 bankruptcy, while the automatic stay temporarily stops lien placements, certain tax debts may still be non-dischargeable, meaning they must eventually be paid. Still, the stay can prevent new liens from complicating the debtor's financial situation during the bankruptcy process.
How Long Does an Automatic Stay Last in Maricopa County?
The duration of the automatic stay varies depending on the type of bankruptcy filed and the specifics of the debtor's situation. In a Chapter 7 bankruptcy, the automatic stay generally lasts until the bankruptcy case is closed or the debtor receives a discharge, which typically occurs within three to six months. For Chapter 13 bankruptcy cases, the automatic stay remains in effect throughout the three- to five-year repayment plan period, provided the debtor complies with the terms of the plan.
Creditors can request the court to lift the automatic stay under certain conditions. In Maricopa County, a creditor must file a motion showing cause for the stay to be lifted, which the court will then evaluate. Common reasons for lifting the stay include the debtor's failure to make post-petition payments on secured debts, such as mortgage or car loans, or if the creditor can demonstrate that their interest is not adequately protected.
Understanding the Difference Between Chapter 7 and Chapter 13 Bankruptcy
Chapter 7 bankruptcy involves the sale of a debtor's non-exempt assets to repay creditors. Under Chapter 7, a court-appointed trustee will oversee the liquidation of assets and distribution of proceeds to creditors. For people who are overwhelmed by debt, Chapter 7 can offer a fresh financial start by discharging most unsecured debts, such as credit card balances and medical bills. At the same time, the automatic stay shields them from aggressive collection efforts. It's important to note that certain assets may be exempt from liquidation under Arizona state law, allowing debtors to retain essential property.
Chapter 13 bankruptcy allows debtors to keep their property while repaying creditors over three to five years in Maricopa County. Unlike Chapter 7, Chapter 13 involves creating a repayment plan that is approved by the bankruptcy court. This plan outlines how the debtor will repay all or part of their debts using future income.
Speak with Our Experienced Maricopa County Bankruptcy Lawyer Today
At Hilltop Law Firm, we have a knowledgeable lead bankruptcy lawyer, Cy Hainey. With almost a decade of legal experience and two years of banking experience, attorney Hainey can answer your questions and assist you with every aspect of Arizona bankruptcy law.
Let's work together to put this issue behind you so you can get back to enjoying all the great things that Maricopa County has to offer. Our firm is prepared to guide you through the complexities of bankruptcy.
For a free consultation with an attentive Maricopa County automatic stay lawyer, contact Hilltop Law Firm at (602) 466-9631.