Automatic Stay

When you file for bankruptcy protection under any chapter of the bankruptcy code, an automatic stay comes into operation. This stay becomes operative as soon as you file the petition in the bankruptcy court. You need not make a separate application for the stay. It becomes operational by law.

You are entitled to this automatic stay provision without regard to the chapter of filing. Generally you will file for bankruptcy protection under Chapter 7 or 13. Most large business file for bankruptcy protection under Chapter 11. Chapter 11 bankruptcy is a form of reorganization. Once you file your bankruptcy petition under any chapter of the bankruptcy code, the stay prevents your creditors from contacting you or continuing any collection activity against you. The creditors cannot file a lawsuit to collect the debt once the automatic stay in is operation. Consult with an experienced bankruptcy attorney..

If you are facing foreclosure, you can prevent your lenders from taking further steps to foreclose on your home by filing for bankruptcy. When you file for bankruptcy under any chapter, the automatic stay will prevent your lender from taking any further steps. Your lender must stop all foreclosure activity once you file for bankruptcy protection. If you want to the foreclosure activities by filing for bankruptcy should file for bankruptcy protection under Chapter 13. This is because in a Chapter 7 bankruptcy, the automatic stay will stop all foreclosure activities. However the bankruptcy trustee appointed by the bankruptcy court will sell your home to pay off the mortgage dues. But if you file for bankruptcy protection under Chapter 13 and include the mortgage payments in your payment plan, you will be able to retain your home if you make regular payments as per the payment plan. Seek the advice of an experienced attorney for using bankruptcy to prevent foreclosure.

Once you have filed your bankruptcy petition in the bankruptcy court, the automatic stay will remain in operation until your bankruptcy petition is over – you receive a discharge or the bankruptcy court dismisses your bankruptcy petition or you withdraw your petition. The stay will remain in operation as long your petition is pending in the bankruptcy court. Your creditors can make an application to the bankruptcy court to lift the stay. However before lifting the stay, you will be given an opportunity to respond to the application. The bankruptcy court will schedule a hearing and then take a decision on the application after hearing both sides. The automatic stay protects you from your creditors. Your creditors cannot:

• bring a claim against you
• enforce a judgment against you
• gain property from you
• create or enforce any sort of lien against you
• collect debts from you

If a creditor violates the automatic stay, you can sue the creditor for damages. Although not required by law, you must inform your creditors of your bankruptcy filing. Always use the service of an experienced Georgia bankruptcy attorney.


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