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Upon filing for a Raleigh bankruptcy, an automatic stay takes effect. This stops any lawsuit that is filed by a creditor or anyone seeking money against the debtor. It is an effective tool if one is behind on child support payments, facing eviction, or in trouble with the utilities.
What an Automatic Stay Can Stop
The automatic stay often lasts until a bankruptcy case is closed or the debts are discharged. However, if the debtor has declared bankruptcy several times in a year, it may only last for 30 days. There are a variety of things that happens once an automatic stay takes place. They include the following:
- Foreclosure Proceedings
If a mortgage holder has initiated foreclosure, the automatic stay stops the proceedings immediately. Debtors who want to keep their house should file for Chapter 13 instead of Chapter 7 bankruptcy in Raleigh.
- Collections of Overpayments of Public Benefits
When a debtor is overpaid, the agency has the right to collect overpayment from future checks or the person directly. An automatic stay can prevent these from happening. However, it could not prevent an agency from terminating benefits if the person is no longer eligible for them.
- Eviction
The automatic stay provides temporary assistance for eviction. However, if the landlord already has a court-issued judgment against the debtor, then it will not affect the proceedings. Automatic stay can buy debtors a few days or weeks.
- Disconnection of Utilities
Utility companies will send threats to discontinue their services if the debtor fails to pay their bills. An automatic stay can stall service termination for at least 20 days.
What an Automatic Stay Cannot Stop
The efficacy of automatic stay varies based on the debtor’s conditions. Instances that the automatic stay cannot stall or prevent include the following:
- Criminal Proceedings
Automatic stay cannot stop criminal proceedings. Take a conviction due to petty theft with a punishment of repayment and community service as an example. While the automatic stay can stop the repayment, the offender still has to complete his community hours.
- Child Support
An automatic stay during Raleigh bankruptcy will not stop a lawsuit for paternity establishment. It also cannot prevent a lawsuit that tries to establish, change, or collect child support.
- Tax Proceedings
The automatic stay cannot stop the Internal Revenue Service (IRS) from conducting an audit, issuing a tax deficiency, asking to file a tax return, or issuing a tax assessment. It can, however, prevent the issuance of a tax lien against income or property.
- Pension Loans
Even with an automatic stay, repayments for certain types of pension loans such as job-related pensions remain.
Get Professional Help from an Attorney in Raleigh, NC
The automatic stay is a powerful tool during bankruptcy, offering protection from garnishment of funds. With in-depth knowledge of the conditions of an automatic stay, debtors can optimize and recover from their bankruptcy.
For professional and compassionate service from a bankruptcy lawyer in Raleigh, NC, consult with Weik Law Office. Our attorneys have helped clients in 15,000 bankruptcy cases for over two decades. Let us help you get your life back on track.
Call Weik Law Office today at 919-845-77221 for a FREE consultation, and set up a time to speak with one of our professionals.