Automatic Stay Protection

California Bankruptcy Lawyer

Debt Collection & Rights Provided by the Bankruptcy Code's Automatic Stay Provision

One of the most important and valuable rights available to a debtor under any chapter of the Bankruptcy Code is the protection provided under Section 362, which, in general, suspends a creditor's debt collection rights. Known as the automatic stay, this section of the Bankruptcy Code bars debt collection activities from the time the bankruptcy petition is filed. There are some exceptions automatic stay protection, and under certain circumstances a creditor can seek the Bankruptcy Court's permission to pursue a particular claim or enforce a security interest. For detailed information about how the automatic stay can protect you in bankruptcy, contact California bankruptcy attorney Gary Greule.

Generally speaking, the Bankruptcy Code's automatic stay provision halts the collection activities of any creditor who had a claim prior to the date of the bankruptcy petition. Actions against the debtor which are prohibited by the automatic stay include:

• A lawsuit against the debtor
• An action to enforce a judgment against the debtor
• An action to repossess any collateral securing the creditor's claim
• A mortgage foreclosure proceeding
• Wage garnishment (whether starting or continuing to garnish wages)
• Demand for payment by telephone, letter, e-mail, or any other means

If a creditor violates the automatic stay, it can be held liable to the debtor in Bankruptcy Court for any resulting damages plus the debtor's attorney's fees on the motion to enforce the automatic stay. As a practical matter, however, most creditors are sophisticated enough to respect the prohibitions of Section 362, and most of the automatic stay violations we encounter are both minor and accidental.

Our proactive approach to client service in Chapter 7 and Chapter 13 bankruptcy cases helps maximize the value of the automatic stay for you. Even before we file your petition, we notify any creditor applying immediate pressure that you will soon be filing for bankruptcy relief. Practically all creditors are willing to suspend their debt collection rights as soon as they hear from us.

In situations where a creditor has a right to obtain relief from the automatic stay - that is, convince the court that it is entitled to repossess collateral, continue a lawsuit, or foreclose a mortgage while the bankruptcy is pending, we work with the creditor from the very beginning to see what we can do to protect your interests. By concentrating our efforts on resolving potential problems early in the bankruptcy, or even before it's filed, we avoid many actual problems for our clients while the bankruptcy case is pending.

For more information about the benefits of bankruptcy's automatic stay, contact the Law Office of Gary D. Greule in Citrus Heights, California, for a free consultation.

We are a debt relief agency. We help people file for relief under the United States Bankruptcy Code.