How The Automatic Stay Stops Creditors, And How To Make It Work For You
March 19, 2007
In most bankruptcy cases, an automatic stay is entered as soon as you file your case. The effect of this automatic stay is to prevent creditors from continuing to collect on debts. That means no phone calls, no collection letters, no legal action, no repossession, no foreclosure, not even a birthday card. No collection activity of any sort is permitted.
So what happens if a creditor continues to contact you after the case is filed? They are violating the bankruptcy laws. If they step over the line, you may be able to collect monetary damages from your creditors. Those monetary damages include legal fees, which means that you should never pay a fee to a lawyer for bringing a case on your behalf.
Let’s say you fall behind on your car loan. If you’re not in bankruptcy, the creditor can repossess your car. But from the moment your case is filed with the U.S. Bankruptcy Court, the lender cannot repossess the car without seeking permission to do so.
Some of the most common violations of the automatic stay include:
- Repossessing your car;
- Sending you a letter or calling you after your case is filed;
- Filing a state court action against you;
- Refusing to release an income execution; or
- Refusing to release a bank account restraint.
Not many bankruptcy lawyers take on cases against creditors. Why? Because the cases skill set that other lawyers have not taken the time to develop. It doesn’t mean that other bankruptcy lawyers aren’t good, though; to the contrary, other bankruptcy lawyers may have spent years honing their craft. It’s just like being a doctor – one physician may be an excellent heart surgeon, and another a great brain surgeon.
The majority of my law practice involves suing creditors to enforce your rights under the U.S Bankruptcy Code. I’ve spent the time to cultivate this unique set of skills necessary to maximize the success of the cases I bring on behalf of my clients. In fact, many of my cases are referred to me by other consumer bankruptcy lawyers. By letting me help their clients they are free to concentrate on what they do best.
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