Automatic Stay Protection During Bankruptcy
Our Jacksonville Bankruptcy Lawyers Explain Your Rights
If you have fallen behind on your monthly bills and payments, you are probably
already aware of how relentless creditors, collections agents, and skip-tracers
can be in pursuing debt. Even when they are acting in accordance with
state and federal law, the tactics that they employ can be annoying and
embarrassing. The Jacksonville bankruptcy attorneys at Owenby Law, P.A.
protect debtors against creditor harassment.
One of the strongest tools against
creditor harassment at your disposal is the automatic stay order, which accompanies Chapter
7 and Chapter 13 bankruptcy. Once an individual files for bankruptcy in
the state of Florida, the judge issues an automatic stay, which acts as
an injunction prohibiting contact from creditors or their agents. If you
need immediate protection via the automatic stay, please contact Owenby Law, P.A.
How the Automatic Stay Protects Borrowers
For a borrower who is being pursued by creditors, the automatic stay can
be extraordinarily beneficial, in that he or she now has several months
to develop a post-bankruptcy plan. The automatic stay is designed to prevent
creditors from attempting to coerce delinquent borrowers who are already
in bankruptcy proceedings. When you file your petition with a federal
bankruptcy court, the judge issues an automatic stay.
Once the automatic stay is in effect, lenders and creditors cannot:
- Contact or harass the debtor
- Repossess property or equipment
- Contact third parties about the debt
- Foreclose on the debtor's property
- Garnish the debtor's wages
All transactions are frozen until the stay is lifted. Generally, the stay
remains in effect until the borrower emerges from
bankruptcy. A creditor may, however, file a motion to lift the stay if they have
grounds. Motions to lift the stay are typically only granted in cases
where the borrower is not acting in accordance with the instructions of
the stay, like failing to maintain insurance on a piece of property that
is collateral for the debt.
Can the Automatic Stay Be Lifted or Removed?
Federal bankruptcy laws do allow creditors to attempt to “work around”
the automatic stay. A creditor can petition the courts with a motion to
lift stay, which only applies to its particular debt. If the stay is lifted,
the lender can continue to pursue collection,
repossess property, or foreclose on real estate—whichever is applicable. Motions to
lift automatic stays are particularly common where collateralized debts
If, for instance, a bank is attempting to foreclose on a house, and the
homeowner declares Chapter 7 to avoid foreclosure, the bank’s attorneys
may file a motion to lift stay with the courts, claiming that the stay
is unfairly hindering their process. In fact, motions to lift stay are
usually only granted when it can be shown that the debtor is using
Chapter 7 or
Chapter 13 as a delaying tactic for repossession, eviction, or
Learn More About Your Options – Call Owenby Law, P.A. Today
The attorneys at Owenby Law, P.A. defend the rights of our clients to be
free from harassment throughout the term of the automatic stay. We also
represent clients in motions to lift stay proceedings. If you are being
aggressively pursued by creditors, you may find refuge in the automatic
stay. To learn more about the automatic stay from a top-tier bankruptcy
lawyer in Jacksonville, please contact Owenby Law, P.A. at (904) 770-3141.
Contact Owenby Law, P.A. to discuss your case with a Jacksonville bankruptcy attorney.