Bankruptcy Law Firm
Arizona Bankruptcy Lawyers
Chapter 7 Bankruptcy
When you file for bankruptcy, the “automatic stay” goes into effect. The purpose of the automatic stay is to protect the debtor and his/her property, preventing creditors from whittling down the debtor’s assets. Simply put, the automatic stay stops pretty much all efforts by creditors to collect on debts, possess collateral, create or enforce liens, or set off debts. The scope of the automatic stay is described in section 362(a) of the Bankruptcy Code. Specifically, the automatic stay prohibits: (1) enforcement against the debtor or property of the bankruptcy estate a judgment obtained prior to the bankruptcy, (2) any act to obtain possession of property of the bankruptcy estate or create, perfect, or enforce any lien against property of the bankruptcy estate; and (3) any act to create, perfect, or enforce any lien to the extent the lien secures a claim the arose pre-bankruptcy.
The automatic stay also prohibits any collection activity on claims that arose pre-bankruptcy and other acts to force the debtor to pay a pre-bankruptcy claim. Some examples of what the power of the automatic stay can do for you:
- stop eviction proceedings
- halt wage garnishments
- help you get your driver’s license back in some circumstances
- stop a lawsuit
- halt a repossession or foreclosure
In a chapter 13 bankruptcy, there is a codebtor stay that goes into effect. The codebtor stay is described in section 1301(a) of the Bankruptcy Code. This codebtor stay prevents any acts to collect all or part of a consumer debt of the debtor from any codebtor.
Our firm will help you maximize the benefit of the automatic stay. We offer free initial consultations in consumer bankruptcy matters. Please visit our website http://www.olgazlotniklaw.com/ for more information about Law Office of Olga Zlotnik. You can connect with us via Facebook and Google+.