An automatic stay gives the debtor protection from his creditors, and brings all of the debtor's assets and creditors into the same forum, the bankruptcy court, where the rights of all involved can be balanced.
The automatic stay prohibits
- Beginning or continuing law suits
- Collection calls
- Foreclosure sales
- Garnishment or levies
The automatic stay remains in effect until
- a judge lifts the stay at the request of a creditor;
- the debtor gets a discharge;
- the item of property is no longer property of the estate.
In Chapter 7, the stay may prevent immediate foreclosure on a debt secured by real estate but the stay will expire, and the creditor freed to proceed, when the debtor gets a discharge. (This assumes that there is no non -xempt equity in the property for the bankruptcy estate.) In Chapter 13, the stay remains in effect for the life of the Chapter 13 plan.
If you are considering bankruptcy and are unsure of what debts can be forgiven, we can help! Contact us online or call The Law Offices of Jacoby & Jacoby at 631-289-4600 to schedule a FREE consultation to discuss your individual situation and all of your options.