Bankruptcy Automatic Stay in Kansas City
Bankruptcy Attorney in Kansas City, Missouri
Filing for bankruptcy is a tough decision to make. Debts are piling over to the ceiling, and creditors are eyeing for your assets to use as collateral. If you’re overwhelmed with unsurmountable debt, the automatic stay helps you get temporary relief from those debts.
Consult with Kansas City bankruptcy attorneys to know how bankruptcy can help you get debt relief.
Because bankruptcy could be a very daunting journey, your bankruptcy attorney will guide you and help you throughout the process of your debt relief.
If ever you filed for bankruptcy – an automatic stay will be granted to your case by the bankruptcy court. The stay provides temporary protection for the debtor’s assets and properties against creditors. However, not all those who filed for bankruptcy will be ensured an automatic stay. If the debtor is granted the stay, there’s also a chance the creditor will file for relief to repossess the debtor’s valuable asset.
Our trusted and well-experienced bankruptcy attorney, Roach Bankruptcy Center, is always ready to represent you if you are from Kansas City, Missouri. With decades of experience handling bankruptcy cases, you can ensure an excellent representation for your bankruptcy petition.T
What is the Automatic Stay?
An automatic stay is a provision under the United States Bankruptcy Code Section 362 after a petitioner files for bankruptcy. You can apply it to either or all of the Bankruptcy Chapters. An automatic stay grants the debtor relief from the creditors who might take away personal property or do a foreclosure. Although this provision is not permanent and can only last for a few months, an automatic stay provides great temporary relief against creditors trying to collect debts.
When a creditor forces repossession or tries to perfect a lien after an automatic stay has been granted, the creditor can be sued by the debtor. There are also a few prohibitions between the creditor and debtor during the automatic stay included in Bankruptcy Code 362. Such prohibitions are:
- Contacting the debtor to demand payment
- Continuous collections of property from the debtor
- Wage garnishment
It is essential to work with your trusted bankruptcy attorney in Kansas City to ensure your rights as a debtor are not being violated.
Although the primary protection from the automatic stay is given to the debtor, it can also protect and provide equal rights to the creditors. This way, if there is more than one creditor – they will have equal footing on possible repossession granted by the court.
Although once an automatic stay takes effect, creditors are unlikely to be paid the exact amount they lend. Suppose the creditors have enough valid grounds to continue collection during the automatic stay. In that case, they can file a petition for relief from the bankruptcy court.
Length of the Automatic Stay
Most automatic stays last until the bankruptcy file proceedings are complete. However, filing for different bankruptcy chapters can also result in a different length of the automatic stay. Debtors who file multiple bankruptcies or have filed for bankruptcy the year before may result in a much shorter duration. An example would be that debtors who filed for Chapter 13 may have a more extended automatic stay period than those who filed for Chapter 7.
If a debtor filed for multiple bankruptcies while their previous petition is still pending, they are called serial filing. For some circumstances, the automatic stay will only last for a month – unless the court provides an extension. This usually happens when a petitioner filed for bankruptcy the previous year.
Suppose a debtor filed for two bankruptcy petitions the previous year and filed a new one in the current year. In that case, the court will grant no automatic stay to the debtor. An exemption to this is through bankruptcy court rulings if they provide a new automatic stay. Primarily, A bankruptcy judge will provide automatic stay for filing three cases if they find it reasonable and greatly needed of the debtor.
However, an automatic stay might also be lifted when the bankruptcy court dismissed the case. There are a few possible reasons your bankruptcy petition could be denied. Defrauding creditors or the debtor having enough valuable assets to file for Chapter 13 (if they filed for Chapter 7 Bankruptcy) are some reasons the court could deny it.
Automatic Stay Exemptions
Not all debts are protected by the automatic stay. Certain types of loans, debts, or payments are not covered and thus will continue to be provided by the debtor. Exempted from automatic stay are:
- Alimony or spousal support
- Child support
- Money owed as a result of a criminal proceeding.
- Regarding domestic violence
- To establish paternity
Suppose there is a case against the Internal Revenue Service or IRS when a debtor is in an automatic stay. In that case, the IRS can seize their tax refund in exchange for repossession or putting a lien on their property.
If the creditor demanded relief, a debtor should have a professional bankruptcy attorney to help them. They can either do debt negotiation or plan possible actions to protect certain personal assets.
Motion for Automatic Stay Relief
When the creditor has enough grounds to continue their collection during the automatic stay, they can file a petition for automatic stay relief. The automatic stay’s motion for relief is a creditor’s request to take action against the debtor or its property that would be otherwise prohibited.
If this happens, possible repossession might take effect. Personal valuable assets such as the debtor’s house or car might be at risk. However, there are still viable options to save those assets if you file a Chapter 13 Bankruptcy. You can either do repayment plans or debt consolidation with lower interest to continue the necessary payment of the debt ( on secured debts). Check with your bankruptcy attorney for possible actions against repossession.
Got Debt? Consult a Kansas City Bankruptcy Attorney Today
Although an Automatic stay provides excellent protection against creditors, it will not last long and is not permanent. It is always best to have the best and most experienced bankruptcy attorney to help you with your case. Roach Bankruptcy Center offers a free initial consultation to provide insight into your case.
Our Missouri bankruptcy law firm can help you choose what type of bankruptcy you should file for a “fresh start.” Consult one of our Kansas City bankruptcy attorneys and reclaim your financial freedom now!