When you file for bankruptcy, an automatic stay is immediately put into effect. While an automatic stay can be helpful for debtors looking for relief, it’s important to know that there are some exceptions that will not be covered by the automatic stay.
An automatic stay is a ruling that prevents creditors from enforcing claims against a debtor that has filed for bankruptcy. It can provide a lot of relief from a debtor that is looking to avoid receiving harassing calls from debtors they are unable to pay back. This means a creditor is not allowed to file a new lawsuit against the debtor or continue to press an existing lawsuit.
While an automatic stay is usually automatically granted, that is dependent on how many bankruptcies a person has filed within 1 year. If a debtor has filed within a year, they may not be eligible for an automatic stay. You will want to work with a bankruptcy attorney if you are filing a second bankruptcy within a one year period.
Automatic Stay Exceptions
There are, however, exceptions to the automatic stay protection. These exceptions include the following:
- criminal prosecution,
- paternity proceedings,
- litigation to collect child support or alimony payments,
- repaying a loan from certain types of pensions,
- and IRS audits
Additionally, landlords seeking to evict tenants that are renting are able to complete the evictions if the landlord has already received a judgment of possession or if the eviction was based on endangerment of property or use of illegal substances on the leased premises.
An automatic stay will not stop or postpone actions to suspend driver’s licenses.
An automatic stay can be very helpful for a debtor looking for some breathing room, but since there are so many exceptions, it’s advised that you work with a bankruptcy attorney that can review the specifics of your filing.
Working with a Bankruptcy Attorney
Bankruptcy can be an overwhelming process. That’s why we advise that you work with a phoenix business bankruptcy lawyer that is familiar with various debt repayment options. We are committed to helping our clients understand their rights and options under the bankruptcy law and developing the debt relief solution that makes the most sense for each individual. We invite you to call (602) 648-3274 or contact our Arizona office to schedule a free initial consultation.
668 N. 44th St., Ste 320, Phoenix, AZ 85008