Effects of the Automatic Stay
Unpaid debt could lead to various unpleasant situations, including disconnection of services, foreclosure, repossession, and even job loss in case of a wage garnishment order. With disconnection of basic services, such as utilities, the automatic stay can prevent it for 20 days. The same is true for wage garnishment, as long as it’s not for high priority financial obligations like child support or alimony. It can also temporarily halt foreclosure or eviction. Take note, however, that, when it comes to evictions, the automatic stay doesn’t apply if:
- Your landlord has already secured a judgment of possession in your eviction case.
- Your landlord has filed claims against you of property endangerment or the use of controlled substances.
Automatic Stay against Foreclosure
The extent of the automatic stay’s influence on foreclosure depends on the bankruptcy chapter you filed under. Both Chapters 7 and 13 trigger an automatic stay, but Chapter 13’s is the better protection against foreclosure. This type of bankruptcy also provides more tools for you to be able to hold on to your home. A Chapter 7 automatic stay doesn’t have much power in stopping a foreclosure unless you get your creditor to officially agree on a debt repayment plan or another kind of debt settlement arrangement.
Unaffected by the Automatic Stay
There are bankruptcy cases wherein the automatic stay is lifted or does not apply. For instance, there are debts that are non-dischargeable. Find out which scenarios cause the automatic stay to be lifted or ineffectual if you’re filing for bankruptcy. Arizona bankruptcy lawyers can tell you in what ways the automatic stay may not be able to protect you, so it’s best to consult one before filing bankruptcy. Here are some examples.
Despite an automatic stay, you’re still open to a collection lawsuit against you in relation to collecting, establishing, or modifying alimony or child support.
- The IRS may still audit you and demand a tax return, even if it can’t issue a tax lien or seize property because of the automatic stay.
- You’ll still have to go through criminal proceedings even with a debt-related case; the criminal part will simply be separated from the debt repayment part.
- You’re still required to repay loans from most job-related pensions. Failure to repay said loans may lead to a portion of your paycheck being withheld.
Do You Want Bankruptcy Protection? Consult an Arizona Bankruptcy Attorney Today!
Bankruptcies offer different benefits. If you want to know what kind of protection a bankruptcy filing will get you, discuss this with an Arizona bankruptcy lawyer. When it comes to any serious financial problems, it’s best to approach a bankruptcy law attorney so you can be accordingly guided toward the best debt relief option for your situation. For legal advice on bankruptcy matters, call us at Phoenix Fresh Start Bankruptcy Attorneys and schedule a consultation with one of our experienced bankruptcy lawyers.