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The Automatic Stay

One of the benefits of filing bankruptcy is protecting your property from creditors pursuing collection actions against you.  You can get automatic stay protection in Chicago as soon as you file your bankruptcy petition. An automatic stay begins to protect all the property you listed on your petition.

How does the automatic stay work?

The automatic stay works like an injunction.  It prohibits creditors from taking any collection actions such as property foreclosure or repossession, garnishment of wages, lawsuits in courts and other demands for payments on debts you owe.

The automatic stay is a powerful remedy that remains in effect until the close of your bankruptcy case.  However, there are some exceptions:

  • A creditor may file a petition in court to lift the automatic stay. If the judge agrees, then the creditor may resume collection activity and possibly causing you to lose your property.  Bankruptcy judges usually will only lift the automatic stay for a very good reason.
  • Most judges will lift the stay for secured creditors in order to take back their property, such as a lender for foreclosure
  • Other exceptions to the automatic stay include child support collection or determination, tax assessments or offsets.  It also does not stop any criminal proceedings

Creditors pay if they violate the automatic stay

If a creditor attempts to engage or engages in prohibited collection activities while the automatic stay is in effect, you are entitled to recover damages and, in some situations, the property itself.  In addition to major collection activities, creditors are also forbidden from using simple collection methods, including, among other things, contact through annoying telephone calls, sending you letters or bills in the mail, and other harassments.  If any of your creditors contact you in violation of the automatic stay rules, you should immediately inform your attorney. Your attorney must prove to the bankruptcy judge that the creditor had knowledge that you filed bankruptcy in order for you to recover damages.

Stop creditor harassment in Chicago through the bankruptcy process.  Learn more about your rights and the other benefits of filing bankruptcy.  Contact DebtStoppers, Bankruptcy Law Firm for more information.

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