Automatic Stay

What is the “Automatic Stay”?

Need to stop creditor harassment, collection actions, garnishments, or a lawsuit? Let our Washington state bankruptcy lawyers help you put an “Automatic Stay” in place.

  • Stop All Collection Actions Immediately
  • Stop Creditor Harassment
  • Stop Garnishments
  • Stop Lawsuits

As soon as a bankruptcy case is filed, a court order is issued called the “automatic stay”. The stay stops all attempts to collect a debt immediately. If a creditor gets notice of the bankruptcy and collects a debt, or even tries to collect a debt, the creditor can be sanctioned for attorneys’ fees and any damages they cause. For instance, if a creditor knows about your bankruptcy and repossesses a car, they can be forced to pay any costs you incur such as car rental fees, parking, cabs as well as emotional distress and your attorneys fees. They may be ordered to pay punitive damages as well. However, they must have known about the bankruptcy. It is important that you provide correct, up to date contact information for creditors when you file your case. Even if they do not have notice, if the creditor gets notice after trying to collect a debt they have to stop and correct any stay violation such as returning garnished wages.

The automatic stay lasts until the bankruptcy is discharged and closed. However, creditors can ask the court to modify the stay. In a Chapter 7, if you are not making payments on a car or a house, they can ask the court to modify the stay so they can proceed with repossession or foreclosure. In a Chapter 13, the plan should provide for payment of mortgages and car loans. If the plan does not, the debtor is not making payments to the trustee or not keeping the property insured, the creditor can ask the court to modify the stay.

The automatic stay covers debts that may not be discharged at the end of the bankruptcy. For instance, some debts such as pay day loans or back taxes may not be discharged at the end of the bankruptcy but the creditor can not try to collect the debt while the bankruptcy is active. However, back child support can be collected while the bankruptcy is active. If a license has been suspended for fines, a Chapter 7 will not reinstate a license but a Chapter 13 will.

If you have filed more than one bankruptcy in the last year, the automatic stay will only last a month and you have to file a motion with the bankruptcy court to show that new bankruptcy was not filed in bad faith.

The automatic stay offers powerful, immediate relief upon filing a bankruptcy case. Because of the threat of sanctions, creditors take it very seriously. However, there are important exceptions and it is a good idea to explore these with an experienced bankruptcy attorney as you prepare your case.

If you are constantly being harassed by creditors and bill collectors at all hours of the day, then you already know that these people are nasty and relentless. They don’t care about you or your family. Many of these collection agents are paid based upon what they get you to pay. Many also freely and consistently violate the Fair Debt Collection Practices Act.

Examples of an attempt to collect a debt include phone calls, letters, lawsuits, garnishments, repossessions and foreclosures. If a driver’s license is suspended for an uninsured accident, the driver’s license must be reinstated. If it is suspended for tickets, only a Chapter 13’s automatic stay will reinstate the license.

If you need to stop aggressive creditor collection actions and constant creditor harassment, or if you are facing lawsuits or garnishments, our Washington bankruptcy lawyers are here to help. If you qualify, we will help you put an “automatic stay” in place by getting your bankruptcy petition filed.

Debtors who seek relief under the bankruptcy laws are immediately protected from all attempts to collect a debt by the automatic stay. The automatic stay is a federal court order that is issued automatically by the filing of your initial bankruptcy paperwork.

We are bankruptcy attorneys in Washington State working and fighting to protect you and your family. Call now for help, information, and answers.

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