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Can Creditors Still Contact A Person After They File For Bankruptcy?

One of the benefits of filing for bankruptcy is the automatic stay, because it gives the debtor some breathing room that they desperately need. An automatic stay goes into effect the moment the bankruptcy is filed. The creditors would need to stop any further actions including calling, filing a lawsuit, proceeding with the lawsuit, levying the person’s bank accounts, or garnishing their wages. In addition, if a foreclosure was scheduled, then that foreclosure sale would also have to stop.

For How Long Will All Creditor Actions Be Stayed Or Paused?

The automatic stay would generally continue to be in place until the bankruptcy was completed, or when a creditor went to court to obtain an order lifting the stay by filing a motion.

Do Creditors Sometimes Try To Attack The Stay And Get It Lifted To Proceed?

Some creditors will try to attack the stay, but depends on the situation. One common situation is when we are dealing with secured debts. For example, car payments or mortgage payments haven’t been made, so the creditor will want to repossess or foreclose in order to recover the property rather than allowing the person to use the car or live in the property while being unable to make payments.

Is It Part Of The Bankruptcy Attorney’s Job To Help Keep The Stay In Place?

Yes, if a creditor filed a motion for relief from the stay, we would look at the motion and consider the legal arguments that might be available for opposing that motion. Sometimes there is simply no argument, because it would be a matter of whether or not they had the money to stay on top of their car payments or their mortgage payments. Other times, there may be problems with the accounting that the creditor had based the motion on, which would be another argument we could point out to the court’s attention.

For more information on Automatic Stay Orders, a free initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (714) 697-8600 today.

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