How does the Automatic Stay in a Florida Bankruptcy help me?
The automatic stay is arguably one of the most powerful features of a bankruptcy. The stay takes effect once a bankruptcy petition is filed and is applicable in every bankruptcy case in every state.
The federal law stops creditors from trying to collect on debt after a debtor has filed the bankruptcy petition. Once a creditor is put on notice that the debtor filed for bankruptcy, the creditor can no longer contact the debtor or the debtor's family members in trying to collect the debt owed. In fact, it is a breach of federal law to do so and the debtor may be entitled to damages.
However, mortgage companies and holders of car notes typically will ask the bankruptcy court for relief from the automatic stay. This is done by filing a motion with the court and if granted, the automatic stay would not longer be applicable to the party who filed the motion. Thereafter, the lender can request that the debtor continue making payments on the property in order to keep it. Such relief is usually not granted until 30-60 days after the initial bankruptcy petition is filed, affording the debtor valuable time to make arrangements to move out of a property or work out a settlement with the lender to catch up their payments.
If you have questions about bankruptcy in general or alternatives to bankruptcy, please contact Jacksonville Bankruptcy Attorney.
Greg Gilbert
Keith Maynard
