One of the best known and most appreciated benefits of bankruptcy is the “automatic stay”. The automatic stay is an action issued by the bankruptcy court as soon as it records your bankruptcy petition filed by Mesa bankruptcy attorneys. It is an immediate, but temporary, measure that stops harassment from creditors (including those nasty, endless phone calls), evictions, wage garnishments, foreclosures, legal actions due to alimony or child support and actions related to tax issues. It also stops any actions to disconnect utilities and drafts on your bank accounts. This stay is in effect until the bankruptcy court lifts it and it yields a debtor breathing room and time to reorganize his or her finances. Keep in mind, however, that this measure is only temporary until the court has time to sort out your issues. Some of the actions that are stayed will not be discharged in the bankruptcy and may continue after the bankruptcy is closed.
bankruptcy lawyers from Mesa offer these specifics on what the automatic stay can do for you:
• Prevents the loss of utilities for at least 20 days.
• Temporarily halts foreclosure proceedings on your home.
• Provides some help in an eviction.
• Prevents the collection of overpayment of public benefits
• Stops wage garnishments, even multiple ones.
• Prevents the IRS from issuing a tax lien or seizing property
As mentioned above, the automatic stay cannot make all your problems go away. Here are some things the automatic stay CAN’T do, not even temporarily:
• Cannot stop the IRS from auditing you, demanding a back tax filing, issuing a tax assessment or demanding payment of an assessment.
• Cannot stop a paternity test or adjustment of child support or alimony agreements.
• Cannot stop criminal proceedings against you. If the crime involves both a debt and a criminal element, it will be divided into the 2 components and the debt part of the charge will be stayed.
• Cannot stop monies being withheld from your salary to repay certain loans from pension funds.
Despite its wide sweeping powers, the automatic stay is not completely resistant to the efforts of creditors. If they approach the court and state their case well enough, the bankruptcy court might, in some instances, lift the stay for certain actions. If, for example, you are facing a foreclosure on your home and your lender can prove that you have no equity in your home, cannot make the payments, even after the bankruptcy or cannot pay off the arrearages, the court is very likely to lift the stay and allow the foreclosure to go forward. Experienced bankruptcy lawyers from Mesa can offer advice on your next steps.