Oklahoma Bankruptcy HelpWhat is an Automatic Stay in a Tulsa Bankruptcy Filing?
By the time a person files for bankruptcy protection, they’ve often been fielding collection calls and letters for some time. Creditors want their money and feel no compunction about calling, often several times a day, to remind a debtor of their legal obligation to repay. It is tiring, and exasperating, and it feels like an endless battle. Bankruptcy law provides an end to this with what is known as the automatic stay.
What Is an Automatic Stay?
An automatic stay is a type of injunction. An injunction is a court order that usually prohibits a person from engaging in a certain type of action. Typical injunctions include stay-away orders, cease-and-desist orders, and restraining orders. Injunctions may be temporary or permanent. In the bankruptcy setting, the person or persons enjoined are the creditor or creditors. They may not contact the debtor once the petition for bankruptcy is filed. The automatic stay is effective as soon as the petition is filed and it ceases once the bankruptcy is closed by the court. It is then replaced with the court’s discharge injunction.
The automatic stay prevents creditors from calling or contacting the debtor. It also stops any foreclosure proceedings that have begun on a debtor’s home or other property. If the debtor is filing for bankruptcy under Chapter 7, the relief granted by the automatic stay will be temporary as Chapter 7 has no mechanism that will allow a debtor to keep their home. If the debtor wishes to keep their home in bankruptcy, the debtor should probably file for reorganization under Chapter 13 as opposed to liquidation under Chapter 7. If you have questions about your particular situation, please contact an experienced bankruptcy attorney in your area.
An automatic stay also stops any lawsuit brought by the creditor against the debtor, and any repossession actions by the creditor. It stops all actions by the creditor to collect the debt or harass the debtor.
Exceptions to the Automatic Stay
There are certain circumstances in which a creditor can get around the automatic stay. In order to do so, the creditor must file a motion to lift the stay in bankruptcy court. For instance, if the debtor has been fighting an eviction proceeding with their landlord and the landlord already has an order allowing them to take back possession of the property, that order will not be affected by an automatic stay.
Likewise, an automatic stay will not stop the IRS from auditing the debtor or issuing a demand for payment. The automatic stay will, however, prevent the IRS from executing a tax lien for at least the duration of the stay. An automatic stay will not prevent legal actions pertaining to paternity or child support, nor will it stop certain criminal proceedings.
Each person’s situation is unique. If you have questions about how the automatic stay will affect you. Bring your questions and concerns to an experienced Tulsa bankruptcy attorney. Get the help you need when you need it most.
Free Consultation with a Tulsa Bankruptcy Attorney
Financial Freedom Bankruptcy Lawyers of Tulsa offer free consultations to help debt-burdened Oklahomans to discover the best approach to their financial crisis. Call us at (918) 786-9600 to start your free consultation today. You may also contact us using the contact form button on this page to ask a professional bankruptcy attorney in Tulsa your personal questions.
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