Automatic Stays and Repeat Bankruptcy Filings in Phoenix, AZ
Bankruptcy can be a difficult process for many individuals and businesses, but it can also provide a fresh start for those who are struggling with debt. Losing the automatic stay for repeat bankruptcy filings can even be more challenging for repeat bankruptcy filers, which is one of the most important protections provided by the bankruptcy process.
The purpose of bankruptcy laws is to stop the small number of persons who file for bankruptcy repeatedly, known as “serial bankruptcy filers,” who may be abusing the system to repeatedly postpone foreclosure or other creditor action. It is important to note that filing multiple bankruptcies in a single year is unusual, and there may be legal or financial consequences for doing so.
Why do I need a lawyer when I’m about to lose my Automatic Stay for Repeat Bankruptcy Filings?
Having a lawyer by your side can help ensure that your bankruptcy case is handled in a legal, fair, and efficient manner, and can give you peace of mind during this stressful time.
Here’s how our bankruptcy attorneys can help you:
- Legal experience: Our experienced bankruptcy attorneys deeply understand the legal system and can help you navigate the complex bankruptcy process.
- Protect your rights: Our lawyer can help protect your rights and ensure that you are treated fairly by creditors and the court.
- Navigate complex process: Bankruptcy can be confusing and overwhelming, and our lawyer can help simplify and clarify it for you.
- Negotiate with creditors: Our lawyer can negotiate with your creditors and work to find a resolution in your best interest.
- Alternative solutions: Our lawyer can help you explore alternative solutions, such as a debt management plan or a loan modification, that can help you avoid a repeat bankruptcy filing.
- Protect assets: Our lawyer can help you understand the potential impact of a bankruptcy filing on your assets and can help you take steps to protect them.
Phoenix Fresh Start Bankruptcy Attorneys can ensure that your case maintains the automatic stay. Those living in Phoenix, Goodyear, Oro Valley, or Tucson, can turn to the Arizona attorneys at our firm for help with matters including repossession, foreclosure, or credit card debt.
What is an “automatic stay”?
An “automatic stay” is a legal protection that goes into effect when a person files for bankruptcy. It is designed to give the debtor a “breathing spell” from their creditors by stopping most collection actions. The automatic stay provides a temporary halt to lawsuits, wage garnishments, foreclosures, and other forms of creditor action against the debtor or the debtor’s property.
What happens when I get an automatic stay?
When a debtor files for bankruptcy protection under Title 11 of the United States Code, an “automatic stay” issued by the court prevents creditors from continuing with or contemplating further collection actions. However, the stay may not be enforced, or may only be valid for a limited length of time, such as 30 days, if the debtor has had a previous case or cases dismissed within one year of filing the present lawsuit unless the debtor takes steps to reimpose or prolong the stay.
The automatic stay prevents any creditor from taking any action against the debtor or the debtor’s property without first getting relief from the stay from the court. If the debtor does not comply, the creditor may file a lawsuit for damages, which may include court costs, legal fees, and even punitive damages, if appropriate.
What’s the difference between Chapter 7 vs. Chapter 13 automatic stay?
Chapter 7 and Chapter 13 are both types of bankruptcy, but they are used for different things and have different ways of doing things.
Chapter 7 bankruptcy is called “liquidation” because the non-exempt assets of the debtor are sold to pay off creditors. Chapter 7 is a quick and easy way to get rid of some debts, but it doesn’t allow the debtor to keep all of their assets and pay back their debts over time. As soon as the case is filed in Chapter 7, an automatic stay is put in place. This stops most collection actions against the debtor and gives them temporary relief from their creditors.
Chapter 13 bankruptcy, on the other hand, is called “reorganization” and lets the debtor keep their assets and pay back their debts over the course of three to five years. Chapter 13 is usually used by people who have a steady income and want to make up for payments they missed while keeping their property. The automatic stay in Chapter 13 is similar to the stay in Chapter 7, but it may last longer and protect you from more types of creditors.
Contact our attorneys at Phoenix Fresh Start Bankruptcy Attorneys if you have any additional inquiries regarding the automatic stay or if you want to find out if you qualify to file for Chapter 7 or are eligible for Chapter 13 bankruptcy. We will take the time to address all of your concerns, go over your bankruptcy options, and give you legal counsel.
How do I request an automatic stay as a repeat bankruptcy filer?
A bankruptcy petition is required to obtain an automatic stay from the bankruptcy court. Your assets, liabilities, income, costs, and other monetary details should all be detailed in the petition, which is a legal document.
The automatic stay will take effect as soon as the petition is filed. On the other hand, you might have to inform your debtors. However, the automatic stay is not a guaranteed remedy; the court might decide whether or not to issue one at its discretion.
Before making any moves, you should talk to one of our bankruptcy lawyers at Phoenix Fresh Start Bankruptcy Attorneys. Our attorney can explain the procedure, your rights, and obligations, and help you complete the paperwork. Additionally, they have the ability to act as your legal counsel in court.
It’s important to note that there’s a fee to file for bankruptcy and that you must also attend credit counseling. Individual debtors’ requests for fee waivers will be considered on a case-by-case basis by the court, which may or may not grant the request depending on the debtor’s financial situation.
Being a repeat bankruptcy filer: What are the reasons?
Multiple bankruptcies in a single year are highly unusual and may have financial and legal repercussions. Becoming a repeat filer in one year can be caused by several factors:
- The first bankruptcy case is dismissed: A bankruptcy case can be dismissed due to a technical error or lack of compliance with court orders. If this happens, a person may refile the case.
- The debtor is not eligible for the type of bankruptcy they originally filed: For example, if a debtor who is not eligible for Chapter 7 bankruptcy files, the court may dismiss the case and the debtor may refile under a different chapter.
- The debtor’s financial situation has worsened after the first filing: Sometimes, a debtor’s financial situation may have worsened after the first filing, making it necessary to file for bankruptcy again.
- Fraud: In some cases, multiple bankruptcies in a single year may be an indication of fraud. For example, if a debtor is trying to discharge certain debts or protect certain assets by repeatedly filing for bankruptcy.
If you have experienced one of the above reasons for being a repeat bankruptcy filer, our team at Phoenix Fresh Start Bankruptcy Attorneys can help you figure out a solution. Our experienced bankruptcy lawyers will work closely with you to understand your financial situation and help you find the best possible outcome.
What are the risks of losing the automatic stay as a repeat bankruptcy filer?
Repeat filers may not be entitled to the automatic stay in the same way as first-time filers. If a debtor has filed for bankruptcy multiple times within a certain period, the automatic stay may be limited or even lifted entirely. This means that creditors can continue to pursue collection efforts, making it more difficult for the debtor to get a fresh start.
The law on repeat filers and the automatic stay varies depending on the type of bankruptcy being filed. Here are some examples:
- Chapter 7 Repeat Filings: Under Chapter 7 bankruptcy, a debtor who has received a discharge in a prior case within the past eight years may not be entitled to the automatic stay. This means that creditors can continue to pursue collection efforts, such as wage garnishment or foreclosure, during the bankruptcy process.
- Chapter 13 Repeat Filings: In a Chapter 13 bankruptcy, a debtor who has received a discharge within the past two years may not be entitled to the automatic stay. This means that the debtor’s creditors may be able to continue with collection efforts, such as lawsuits or wage garnishment, during the bankruptcy process.
- Filing for bankruptcy multiple times in a short period: If a debtor has filed for bankruptcy multiple times within a short period, such as within a year, the automatic stay may be limited or lifted entirely. This means that creditors may be able to continue with collection efforts while the debtor is in bankruptcy.
- Lack of good faith effort to repay debts: If the court finds that a debtor has not made a good faith effort to repay their debts, they may be denied the automatic stay. This means that creditors may be able to continue with collection efforts, such as lawsuits or wage garnishment, during the bankruptcy process.
It’s important to note that these scenarios and the laws surrounding repeat bankruptcy filings can vary by state and by the type of bankruptcy being filed.
There are also other factors that can impact the automatic stay for repeat filers, such as the type and amount of debt, the debtor’s income, and expenses, and whether the debtor has made a good faith effort to repay their debts. A bankruptcy attorney can help to evaluate these factors and determine whether the automatic stay will apply in a given case.
Get Your Financial Footing Back on Track
Financially, there are a lot of ways that filing for bankruptcy more than once might affect you. Filing for bankruptcy is a lengthy process that requires financial resources for legal representation and court fees. Repeated bankruptcies have the same negative effects on credit as the first one, making it more difficult to obtain credit in the future. Also, you may lose your right to the automatic stay if you file for bankruptcy more than once, which could prevent you from resolving your financial woes.
We at Phoenix’s Fresh Start Bankruptcy Attorneys want to reassure you that life after bankruptcy can be a new and better one. Filing for bankruptcy can be a complicated process, but our team of skilled bankruptcy attorneys can help you through it. With the knowledge that each client’s financial condition is one of a kind, we tailor our services to meet your needs.
With our help, you can get a fresh start, eliminate debt, and move forward toward a brighter financial future. Get your financial footing back on track by contacting us today for a free, no-obligation, stress-free financial analysis consultation, and take the first step toward a fresh start!