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 are involved.

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 foreclosure.

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.