Asaph Abrams Attorney at law

San Diego Bankruptcy

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What is the automatic stay?

The moment your chapter 7 bankruptcy or chapter 13 bankruptcy petition is submitted, an automatic stay is issued.  This is a court order that immediately stays or stops all adverse creditor action.  All collections, repossessions, lawsuits and garnishments are halted.  The stay remains in effect for the duration of your bankruptcy case until debts are discharged or canceled.  


However, a secured creditor with a lien can usually file a successful objection to the stay (a motion for relief from stay).  Thus, if you are in default, mortgagees and car lenders can overcome the automatic stay.  They could resume foreclosure or repossess unless another solution is reached to maintain your collateral, for example through a chapter 13 bankruptcy.  A chapter 13 bankruptcy plan could provide for payment of the mortgage arrearage or adjustment of a car loan.  Unsecured creditors won’t benefit from opposing the stay.  However, they can later object to the discharge of the debt. 


Certain other actions aren’t subject to the automatic stay, such as collection of child support.


The automatic stay is limited to 30 days if you had a prior bankruptcy case pending during the last year. The stay won’t be in effect at all if you had two bankruptcy cases pending during the last year.  The court frowns upon multiple bankruptcy filings and voluntary dismissals designed to postpone collections without intent to complete a bankruptcy.  The automatic stay can be extended or reinstated if you can demonstrate that prior dismissals were not the result of bad faith or manipulation.  You would need to show a sincere desire to complete your bankruptcy.


General Bankruptcy Questions

San Diego bankruptcy attorney
San Diego bankruptcy attorney

To discuss your particular situation, please call (858) 344-0500 to schedule your free consultation.