AUTOMATIC STAY AND BANKRUPTCY FAQs

The automatic stay is one of the most important functions of filing a bankruptcy case. The automatic stay is the protection that you receive from the US bankruptcy court from your creditors. The automatic stay, “stays” or “freezes” most creditor action when a bankruptcy case is filed. The stay happens as soon as a bankruptcy is filed, this includes Chapter 7, Chapter 11, and Chapter 13 bankruptcy filings in Nevada.

For example. If your wages were about to be garnished, and you filed a bankruptcy case before the creditor had a chance to attach your pay, the filing of the bankruptcy case would stop the garnishment. If your house was going into foreclosure, and you filed a bankruptcy case before the foreclosure date, the filing of the bankruptcy case would stop the foreclosure. Another example; assume your car payment was so far behind that it was about to get repossessed. If you file a bankruptcy case before the car is taken back by the creditor, the filing of the case would stop any repossession action by the creditor.

What is an Automatic Stay?

ANSWER:

The Automatic Stay is a feature of bankruptcy that goes into effect once a bankruptcy is filed. It stops all collection actions and prevents: wage and bank account garnishment, foreclosure, repossession, and other legal proceedings against the debtor. The Automatic Stay is one of Bankruptcy’s most powerful tools.

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How long does the Automatic Stay remain in effect?

ANSWER:

As long as your Chapter 7 or Chapter 13 bankruptcy is not dismissed or discharged, your Automatic Stay stays active.

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Can the Automatic Stay stop a Foreclosure?

ANSWER:

Yes, temporarily, The Automatic Stay will stop a foreclosure. The Foreclosurewill resume after the bankruptcy closes if the debt is not resolved during the bankruptcy. In Chapter 7, (which typically lasts 3-5 months,) in order to keep their home, the filer would have to catch up on their mortgage payments independently of their bankruptcy. This would have to be done before the bankruptcy is discharged. before the case is discharged.

In Chapter 13, the past-due mortgage will be included in the payment plan. Which usually lasts 3-5 years. Whereas, if the filer successfully completes the payment plan, the foreclosure will not resume after the case is discharged.

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Will the Stay stop creditor calls? What about other collections?

ANSWER:

Yes, an Automatic Stay orders creditor calls to be stopped. However, your creditors should have already stopped contacting you as soon as you retained a Nevada Bankruptcy Lawyer. Providing that you let your creditors know that you were being represented, the creditors should be calling your bankruptcy attorney with their creditor calls.

Therefore, once you are represented, creditors should stop bothering you. Also, they should direct all their questions about your debts to your attorney. Additionally, they will be notified when you do file. Thus, if you did not inform your creditors when you retained your Vegas Bankruptcy Attorney, they will be notified by the bankruptcy court of your filing. Also, your bankruptcy lawyer will need to include a mailing matrix of your creditors with your bankruptcy petition, so your creditors will be informed that the Automatic Stay is in effect once you file.

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How long does it take to lift the Automatic Stay?

ANSWER:

The Automatic Stay lifting is dependent upon circumstances. Circumstances like, the specific case and judge. Additionally, judges have 30 days to set an initial hearing on a Motion for Relief from the Automatic Stay. Plus, another 30 days to set the final hearing. Though, this hearing can be expedited under special circumstances.

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What are some reasons that the Automatic Stay may not apply?

ANSWER:

If the property you owe for is worth less than the balance of the debt, your creditor may be able to successfully appeal the Automatic Stay. If you are in a Chapter 13 and the property isn’t required to be included in the reorganization, it may also qualify for revocation of the Automatic Stay. The creditor may also be successful if there isn’t adequate protection for the collateral for the debt (i.e., insurance coverage).

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Is there a difference between an Automatic Stay in a Chapter 7 and a Chapter 13?

ANSWER:

The Automatic Stay serves the same purpose in both Chapter 7 and Chapter 13. The Automatic Stay in both Chapters serve the same purpose, and the only difference is the length of time they last. Unless the case is dismissed, a Chapter 7 bankruptcy lasts 3-5 months while a Chapter 13 bankruptcy lasts 3-5 years. The stay lasts for the duration of the case and the length of the stay is dependent upon the Chapter of bankruptcy that you file.

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How long is an Automatic Stay in a Chapter 13?

ANSWER:

Usually, the Automatic Stay in a Chapter 13 will last as long as the payment plan. A payment plan in a Chapter 13 bankruptcy lasts 3-5 years. Therefore, if you file a Chapter 13 bankruptcy in Nevada and it is dismissed, and you file again within 1 year, the Automatic Stay will only last for 30 days. Thus, it is important to make your Ch 13 payment plan payments and not let your case get dismissed.

Plus, to extend the Automatic Stay, you will need to contact the court. Therefore, if you file a third time within 1 year, you will not receive the protections of the Automatic Stay at all. You can apply to still receive the Automatic Stay, but will need to show good reason to the court of why it is necessary.

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Automatic stay and bankruptcy infographic

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All You Need To Know About The Automatic Stay

The automatic stay in bankruptcy is very powerful. Not only can creditors not take action such as foreclosure or repossession, but creditors cannot attempt to collect from you while there is a pending bankruptcy case. It is essential to bankruptcy and there are severe penalties for creditors who violate the automatic stay.

Like any rule, there are a few exceptions. For example, with the automatic stay, sometimes it is not in effect if a person files multiple bankruptcies within a certain amount of time. Please consult an experienced Vegas Bankruptcy Attorney as to when the Automatic Stay is not going to protect you when filing for bankruptcy.

Therefore, any person in Vegas or Clark County who is facing a foreclosure, repossession, wage garnishment, or other creditor collection antics, please consider seeking the assistance of a qualifies Nevada debt relief attorney for protection. Our office offers free consultations either in one of our Las Vegas Metro Area offices or by phone. Call for a free debt evaluation with one of our Zero Down Bankruptcy Lawyers.

Vegas Zero Down Bankruptcy Lawyers are a debt relief agency. We help people in Las Vegas, Henderson, Sumerlin, and all of Clark County, Nevada file for bankruptcy.