The automatic stay under bankruptcy law is when a creditor is prohibited from enforcing any collection action or taking any other action to enforce a debt while an individual or business is under the protection of the bankruptcy proceedings.
Understanding the concept of Automatic Stay Under Chapter 13.
The automatic stay order also prohibits creditors from commencing a foreclosure proceeding on secured property, repossessing collateral used as security for such debts, and commencing actions to foreclose liens on personal property. To get detailed information, connecting with a bankruptcy law firm Butler County PA is the best choice.
The automatic stay does not prohibit creditors from continuing lawsuits by connecting with bankruptcy lawyers and influencing decisions relating to judgments entered against the debtor before entering into bankruptcy.
What will happen after the automatic stay?
Within one year of filing for protection concerning certain debts, most individuals may seek relief from the automatic stay if they fail to pay their taxes or perform other legal obligations.
The purpose of the automatic stay is to create a “cooling off” period so that individuals and businesses may seek a fresh start. The automatic stay prevents creditors from taking immediate action against debtors so that they may consult with attorneys and restructure their financial affairs. A Bankruptcy attorney from a good Bankruptcy law firm will give you detailed guidance on proceeding further.
What happens under the Bankruptcy Code?
Under the Bankruptcy Code, the Statute of Limitations on Debt Collection for consumer debts are suspended for the duration of your bankruptcy case. The Statute of Limitations on Debt Collection is how long after you become delinquent before you lose your right to collect on the debt.
This gives the debt collectors an incentive to be more flexible with you. They know that if they work with you and get payments from you regularly, then even if your payments are poor, at least the Statute of Limitations on Debt Collection will be protected.
In most states, once a bankruptcy case has been closed in full, a discharge is issued, which only the debtor and his bankruptcy attorney can see. The discharge includes everything that has been filed and discharged by the court. This consists of any debts on non-dischargeable debts such as back taxes or certain types of debts such as student loans or domestic support obligations. This document legally eliminates these particular items from appearing on credit reports after the discharge date. To walk through this process smoothly, you must hire a good bankruptcy lawyer.
Conclusion
As a result of this discharge, credit bureaus are not allowed to report any further activity on debts that the bankruptcy has discharged. However, even though credit reports will not show the debts listed in the discharge, it is expected that any creditor will continue to try and collect these debt(s) until they are notified that they have lost their right to do so. For more information visit – www.dairosenblumchapter11.com
