Wallace Law Office..........

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STOPPING HARASSMENT, LAWSUITS, AND GARNISHMENTS

When your attorney files your properly prepared bankruptcy petition at the bankruptcy court, a federal court order automatically comes into effect which stops (stays) most types of collection actions against your property. This court order is called the "automatic stay."

The automatic stay is a very powerful order which is designed to stop creditors from seizing your property while the bankruptcy case is going on. It affects credit card companies, medical bill collectors, landlords, mortgage companies, and even the IRS. Creditors who are affected by the automatic stay must immediately stop harassment, lawsuits, garnishments, and all other attempts to make you pay them money. If they fail to cease collection efforts, they can be held in contempt of court and fined. Certain special types of debt collection are not stopped by the automatic stay, such as child support or alimony garnishments. At your free initial consultation, you will be advised regarding which of your creditors will be stopped by filing a bankruptcy.

The time at which the creditors must cease collection is when they receive notice of the filing of the bankruptcy. The bankruptcy court normally sends out the notice about a week after the filing, but sometimes the notices go out late. There are ways you can stop garnishments and lawsuits faster than waiting for the court notice to come out.

The automatic stay also applies to home foreclosures. In a chapter 7 case the automatic stay only lasts for about three months, however, and the foreclosure can resume after the automatic stay is lifted. In a chapter 13 case the automatic stay can stay in place long enough for you to make up the past due payments.

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