Automatic stay violation - How can you win a case against creditors?

An automatic stay is one of the noticeable benefits of filing bankruptcy. It's significant since it not only offers immediate protection to a debtor filing bankruptcy and saves their assets from creditors and debt collectors.

What do you mean by an automatic stay in bankruptcy?

Automatic stay offers a wide range of protection to a debtor’s property and starts immediately after a bankruptcy case is filed in a state or supreme court. The stay prohibits nearly all forms of collection attempts and actual damages done by creditors or debt collectors. Thus, once the bankruptcy petition is done, it relieves the debtor and gives him additional time for debt discharge or repayment.

When do you need to file a motion to extend an automatic stay?

It wouldn’t be imposed if you had two bankruptcy cases dismissed in the previous year and filed a new one in the current year. Even if it is imposed, it stays in effect for only 30 days. In this situation, you have to file at the court to extend the automatic stay.

How can you send the notices to the creditors?

  • You need to send a direct statement to the creditors.
  • There is an automated system to send alerts to creditors.
  • Send the receipt of the court notice mentioning the date.
  • Attach a copy of the bankruptcy petition.

Which forms of collection acts stop with automatic stay?

Section 362K1 of the federal Bankruptcy Code mentions that almost all forms of collection attempts, including debtor’s wage garnishments, collection efforts via calls and emails, repossession of debtor’s property or assets, foreclosures, and related legal processes or lawsuits, should be stopped immediately after a successful filing of the bankruptcy petition.

What should you do to impose an automatic stay immediately?

Usually, it is imposed 30 days after filing the bankruptcy petition. It doesn’t always safeguard debtors from all creditors. Thus, creditors must file a motion for imposing or continuing the automatic stay in an individual case. Debtors have to pay a separate fee for this. Since everything must be done quickly and the bankruptcy judge has to preside over the case immediately, it’s best to consult a bankruptcy attorney before filing a motion.

How can you get help from us when your creditor violates the automatic stay?

If it is a willful violation of the bankruptcy code, we will help you in the following ways:

  • We will inform your creditor about the bankruptcy upon notice.
  • If the violation continues, we will alert the bankruptcy court.
  • Based on the report, the bankruptcy judge will take further action.
  • Filing a lawsuit will be the next step.

How can I help you win a case of automatic stay violation?

Once you contact us:

  • You will work with one of my assistants in our law firm, who will ask you for a brief of your case.
  • I will review your file and directly contact you.
  • I will check the details of your bankruptcy petition.
  • I will assure you that the creditors cannot harass you.
  • I will track the punitive damages and take action against it.
  • In your case, I will find the creditor who has made the willful violation of the automatic stay.
  • I will help you put a hold on wage garnishment.

Can an automatic stay be imposed on your non-dischargeable debts, too?

Bankruptcy doesn’t discharge non-dischargeable debts. For a bankruptcy filer, an automatic stay is imposed on the non-dischargeable debts, and once the stay ends, creditors can resume collection activity.

Can creditors try to revoke the automatic stay?

Creditors are not powerless after an automatic stay is imposed. If they want to resume the collection process, they can file a motion for relief from the court. If the motion is approved, it will be revoked, and creditors may resume the collection process again.

How can I help you hold creditors in contempt before the court?

Well, I'll try to prove 3 points before the court, and these are:

  • The automatic stay violation has happened.
  • It has been a willful violation.
  • The violation leads to actual damages.

What happens to an automatic stay when the court is closed due to a pandemic or other reasons?

Sometimes, the federal courts remain closed due to unavoidable circumstances like a pandemic, even when your case is in process. In those situations, the automatic stay remains in effect, and creditors can't make collection efforts during this period.

Does the stay help the creditors?

In a Chapter 7 bankruptcy , the stay allows the bankruptcy trustee to figure out which properties of the debtor's estate can be used to pay off their creditors (as much as possible). Chapter 11 or Chapter 13 allows the debtors to plan their finances, reorganize debts, and create a payment plan.

On what grounds can creditors appeal for the automatic stay revocation?

There are a couple of grounds based on which creditors can appeal for automatic stay revocation. Some of them are given below:

  • Your property value is less than the debt amount.
  • The property is not required in the reorganization of debt.
  • Lack of adequate protection for the collateral against the debt.

Do you know the meaning of termination of automatic stay?

The automatic stay is terminated, and the property is out of the bankruptcy estate. Creditors are free to foreclose or repossess the property by state law when the debtor doesn’t file a statement of intention on whether they want to surrender or redeem or affirm the property on time.

Can creditors file lawsuits against you when there is an automatic stay?

Usually, creditors can’t file lawsuits against the bankruptcy filer after receiving an automatic stay. If creditors want to file lawsuits outside bankruptcy, they have to appeal and receive relief from the court, and they have to give valid reasons why they want to file lawsuits outside bankruptcy.

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