The Kurland Law Group focuses its practice on helping individuals, families, and businesses recover from the overwhelming burden of debt. The firm’s attorneys are committed to providing the highest levels of service and communication. You won’t find the firm to be “just another” bankruptcy law firm. You will get personalized client service, attention to detail, and an honest commitment to helping you transform your financial future.
An automatic stay is a clause in US bankruptcy law that bans collection agencies, lenders, and government agencies from chasing borrowers for money they owe for a limited period.
When a debtor files for bankruptcy under Section 362 of the US Bankruptcy Code, an automatic stay is triggered, which lasts for 180 days. It applies to people, businesses, and all of the provisions of the Code, and it is not limited to any one type of bankruptcy.
An exception to the automatic stay is made for those who are not debtors, such as business subsidiaries, corporate executives, and co-defendants who are not parties to the lawsuit.
Automatic-stay provisions shield a debtor from certain actions taken by their creditors, such as the initiation or continuation of legal actions against the debtor; the filing of a foreclosure action against a debtor’s property; the creation, perfecting, or enforcement of a lien against a debtor’s property; and the attempt to repossess the collateral.
If a creditor contacts or tries to file legal action against a debtor after an automatic stay has been imposed, the debtor may file a lawsuit against the creditor. When a debtor decides to file for bankruptcy, the benefits of an automatic stay are frequently the most important factor to consider.
Another goal of the automatic stay is to level the playing field for all creditors by preventing one creditor from seizing a debtor’s assets before all other creditors have had an opportunity to do so. After an automatic stay is in place, creditors will be unlikely to recover the full amount of money that they are owed until the stay is lifted. Instead, they will receive a share of the bankrupt debtor’s restricted assets following their share of the debt. Creditors who believe they have adequate reasons to ask the court to lift the automatic stay and allow them to proceed with the collection process might do so by filing a petition with the court.
In some cases, a court may provide relief from an automatic stay “for good cause shown, such as the failure to provide effective protection of a property interest…” A situation where the value of a property or secured collateral may fall while a bankruptcy case is being decided comes under this category of conditions. A mortgage holder who owns a piece of real estate, for example, may be able to collect payments from the person or business that filed for bankruptcy if the value of the property is predicted to decline while the case is in progress.
Additionally, if the property is not directly owned by the debtor, or if the property will not be included in a bankruptcy reorganization, the stay may be lifted.
However, many sorts of debts are not protected by an automatic stay of execution. Child support and alimony payments, as well as money owed as a result of a criminal investigation, are examples of what is considered a debt.
Even while the Internal Revenue Service (IRS) cannot attempt to collect the debtor’s tax bills or place a lien on their property while an automatic stay is in effect, it can take the debtor’s tax refund during that time.
The automatic stay is in effect as long as the bankruptcy proceeding is ongoing, and it is terminated if the case is dismissed in its entirety. Whether or not the stay relates to collection action directed at the debtor personally or their property also influences the length of time the stay is in effect. The length of a bankruptcy case can also vary depending on the type of bankruptcy filing, with Chapter 13 bankruptcy cases often lasting far longer than Chapter 7 bankruptcy proceedings.
Another consideration is the number of bankruptcy cases in which the debtor has been involved. Serial filings refer to the filing of more than one bankruptcy case at the same time in a single jurisdiction. For example, some debtors will file for Chapter 7 bankruptcy initially and then file for Chapter 13 bankruptcy later on in the process. For example, if a debtor has one lawsuit pending during the previous year and then files a second one, the automatic stay in the second case will only be in effect for 30 days unless the court grants an extension of time. If a debtor has had two cases pending during the previous year, no automatic stay will be invoked when a third case is filed, unless a motion is filed with the court and a judge determines that filing three cases is reasonable in the debtor’s circumstances, in which case the automatic stay will be invoked.
By law, when you hire an attorney to handle your foreclosure, address your student loan debt, or resolve other debt problems, collection agencies and creditors must immediately cease contacting you. The harassing phone calls at home and work will stop right away. The threatening collection letters will come to your attorney, not your mailbox. In about 90 days, you can have the fresh start your family needs. A competent Rockville bankruptcy attorney can also advise you about unfair debt collection practices and make sure your creditors adhere to them.
Bankruptcy is not exclusive to lower-income residents. Higher-income individuals come to Kurland Law Group seeking a fresh financial start. With more than two decades of experience, the attorneys at the firm have the knowledge and skill to effectively handle complex bankruptcy filings, which often include qualifying clients via the means test for a Chapter 7 discharge.
For clients from all incomes and backgrounds, the firm provides personalized attention, unlike many bankruptcy mills where clients are numbers, not names.
Many clients are facing the worst situation they can imagine. Yet,filing for bankruptcy may not be the best option for them. Their financial problems can be fixed with a loan modification of their mortgage or short sale of their home, vacation residence, or investment property. Programs exist where property values are reduced and payments are lowered. A bankruptcy and loan modification attorney from Kurland Law Group can help you determine which debt relief strategy is appropriate for your situation.
Discuss your concerns and get answers to your questions about bankruptcy. Talk to an experienced and dedicated bankruptcy lawyer. Contact Kurland Law Group to arrange a free confidential initial phone consultation today. Call (301) 804-0625.
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