When you file for Chapter 7 or Chapter 13 bankruptcy, it activates an automatic stay. This is an injunction that immediately stops most creditors from taking action to collect debts. This protection is a huge help for debtors, and it can be reason enough to file for bankruptcy.
The Utah bankruptcy automatic stay does not apply to all types of debt, however. What follows is a basic outline of what collection actions the stay does and does not protect, and information about how long the injunction remains in effect.
The bankruptcy stay is a lifesaver for many debtors. Some of the ways this injunction can help include:
The bankruptcy stay is a powerful tool, but it isn’t helpful in every financial situation. The injunction will not stop:
The bankruptcy stay generally lasts until the day you receive a discharge. At that point, you can expect to see collection action on any debt that remains. However, any creditor who doesn’t want to wait until then can file a motion to lift the stay. If the court grants the motion, the creditor can resume collection.
Multiple filings are an exception to this rule. If you filed two bankruptcy cases in the last year, the automatic stay will only last for 30 days unless you can prove that your current claim was filed in good faith.
If you have questions about Chapter 7 or Chapter 13 bankruptcy, the Law Office of Davis & Jones, P.C., can provide expert answers.
Our legal team, led by attorneys Lee J. Davis and Tony G. Jones, has a combined 40 years of experience helping people in the greater Salt Lake City area obtain relief from their debts. The Law Office of Davis & Jones, P.C., can guide you through the bankruptcy process and help you gain control over your financial future.
For more information on the bankruptcy automatic stay or expert advice on how you can become debt-free, contact us today.