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What Is an Automatic Stay?

What Is an Automatic Stay?

This year has been a challenge for all of us.  In these uncertain times, many of us are simply trying to figure out how we can go on about our days as normally as we can.  If you are going through a tough time financially, things can compound very quickly and make you feel as if you can’t keep your head above water.  Creditors and collectors will unfortunately still try to obtain anything they can from you to settle a debt.  Many people might not know that when you file for bankruptcy, an automatic stay is put in place that can provide some relief from the bombardment of creditors trying to get money from you.

An automatic stay is a legal constraint that is put in to place when someone files for bankruptcy. Automatic stay is a fancy term for STOP. For most creditors, if a creditor is suing you, sending you letters, or calling you, they must stop once the automatic stay starts. It delivers a much-needed break that can help you put things in order and set you on the path to regaining control of your finances.  While an automatic stay seems like the answer to all of your problems, you have to remember that it does have its limits.

To start, an automatic stay won’t protect you in every instance.  It does not protect you in the event that you are being taken to court for alimony or child support.  Should you be involved in criminal proceedings, an automatic stay might not help you there either.  If you have a fine, there is a good chance you will still be responsible for paying it.  There is also the possibility that a creditor can try to appeal your automatic stay and have it lifted. This most often occurs if you have not cured any missed payments owed to a secured creditor or your landlord.  If you are unable to provide adequate protection to those creditors, those creditors are often able to request the court to terminate the automatic stay to allow them to repossess the secured asset or move forward with an eviction action.

Finding out exactly what your options are while going through bankruptcy is exactly what Nikolaus & Hohenadel, LLP sets out to do with every client that walks through the door.  We have experienced lawyers that will help you determine whether you should file for chapter 7 bankruptcy or chapter 13.  We can assist you with understanding your rights and aid you in navigating the ever-confusing landscape of bankruptcy.  If you are looking for a fresh start with your finances, but don’t know how to get there, the team at Nikolaus & Hohenadel, LLP will make it so that you can have one less thing to worry about.  With offices in Lancaster, Columbia, Elizabethtown, Strasburg and Quarryville, we are close by no matter what your needs are.  Visit us online to schedule an appointment and allow us to help you during these difficult times.