What Is An Automatic Stay?
A San Jose bankruptcy attorney answers the question: What Is An Automatic Stay?
One of the main reasons why people file for either chapter 7 or chapter 13 bankruptcy is to protect assets, namely their house or cars. The instant an individual files for bankruptcy, regardless of the chapter, they are afforded certain rights protected by the U.S. government which will not allow a creditor to levy or foreclose upon assets which they would normally be entitled to.
In order for a creditor to continue collecting on a debt while the debtor is in bankruptcy, the creditor must file a motion with the court which is called a “relief from automatic stay.” If the court does, after good cause being shown, grant the relief from stay which bankruptcy affords the creditor, the creditor regains its state action rights and can continue on the foreclosure from the point where it left off.
Automatic stay remains in effect so long as the debtor is in bankruptcy. In a chapter 7 bankruptcy, once the debtor’s debts are discharged, the automatic stay is converted into a permanent injunction barring the creditor from brining any action. In a chapter 13 bankruptcy, the stay remains in effect throughout the life of the chapter 13 bankruptcy plan. Should a creditor purposefully violate the automatic stay of bankruptcy, courts may award the debtor actual damages, and should the court find the creditor’s actions malicious, they may award the debtor punitive damages in order to deter that creditor, and all others, from future like actions.
If you have a question regarding Bankruptcy in San Jose please contact us at 408.279.2288 or visit www.bkanswers.com and we can connect you with one of our experienced San Jose Bankruptcy Attorneys. After you have spoken with one of our San Jose bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. Our team of San Jose Bankruptcy Lawyers can assist you with all aspects of your case. If you have questions about filing a chapter 7 bankruptcy, a chapter 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your financial needs. Please feel free to complete our free bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy.
