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Yulee Bankruptcy Attorney: Automatic Stay

Automatic Stay, Debt, Bankruptcy
Let’s face it, when people file bankruptcy it’s because they want their creditors to leave them alone. They’re tired of the receiving second and third late notices and of the constant telephone calls. They may even admit they owe the debts, but now there’s penalties and interest they can’t afford. Bankruptcy may be a solution.
Regardless of which Bankruptcy Chapter you choose, an automatic stay goes into effect when you file. The automatic stay prevents creditors from making collection attempts -this is a very powerful thing.
If someone files bankruptcy and the next day their house is sold by the court, there trustee can request that the state court judge “vacate” the sale and depending on the kind of bankruptcy the debtor can continue to live in the house and catch up on their arrearage.
Sometimes creditors try and ignore the bankruptcy rules by attempting to collect a debt despite the fact that a bankruptcy has been filed. This is called a violation of the automatic stay and depending on it’s severity, it can lead to big fines for those creditors to pay. In some cases, the bankrupt individual will see the proceeds from those fines.
The automatic stay protection stays in place from the date of filing until discharge unless one of two things happen: 1. the debtor somehow fails the bankruptcy; or 2. the creditor petitions the court for permission to collect on the debt. The latter of these two requires a pretty good argument and isn’t often requested unless the debtor intended to surrender the property in the first place.
If you have questions about how the automatic stay can help you, contact a Yulee Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

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