Bankruptcy: Taking Full Advantage of an Automatic Stay

When you file for bankruptcy, an action called an “Automatic Stay” immediately takes effect, which halts any actions made by your creditor against your property, including lawsuits and wage garnishments. This action can be extremely useful for someone who’s at risk of being foreclosed on, being evicted, or losing basic services such as utility services, unemployment benefits, or a job. As such, the Automatic Stay offers a very compelling reason to file for bankruptcy.

There are ways for creditors to get around the Automatic Stay, however. One way they can do so is to ask the bankruptcy court to lift the stay because it is not serving its intended purpose. For instance, imagine that you file for bankruptcy before your property is to be sold in foreclosure. If your creditor requests to have the stay lifted, the bankruptcy court will likely grant that request because you’re in a position where you have no equity on the house and you have no means of keeping the property.

To take full advantage of the benefits of an Automatic Stay, and to prevent your creditors from getting around it, it behooves you to have a good lawyer to represent you in bankruptcy court.