Automatic Stay in Bankruptcy - Stopping Creditors

The automatic stay is a rule that prevents any creditor from doing anything at all to enforce a claim against a debtor during the bankruptcy case. The granting of the stay depends on how many bankruptcies a person has filed within 1 year. A stay may not be automatic if the debtor has filed a previous bankruptcy within the prior year. A bankruptcy attorney can advise you on how to file a motion for additional stay protection if it is not automatic.

Creditor Violations of a Bankruptcy Automatic Stay

Some examples of actions by a creditor that would violate the stay are as follows: Filing a new lawsuit, or continuing to press a lawsuit that had already been filed; Sending dunning letters or making phone calls in an attempt to collect a debt; Filing a financing statement to perfect a security interest; Refusing to issue a transcript of your schooling; Suspending your driver’s license.

Exceptions to an Automatic Stay

There are exceptions to the automatic stay protection. These exceptions include: Criminal prosecution, paternity proceedings, litigation to collect child support or alimony, repaying a loan from certain types of pensions, and IRS audits are not stopped. With residential real estate leases, landlords seeking to evict tenants are free to complete evictions if the landlord already has a judgment of possession. Your landlord can also file for eviction after the bankruptcy is filed based on endangerment of property or use of illegal substances on the leased premises. Moreover, the automatic stay doesn't stop or postpone actions to suspend driver's licenses and revoke professional licenses related to a prosecution by a governmental unit, like your state’s attorney general office. Consult with a bankruptcy attorney to determine which exceptions may or may not apply to your situation.