What’s an Automatic Stay? Do You Qualify?
When you file for bankruptcy, does that always keep the creditors from pursuing you as a debtor? No, so we are here to tell you how you can keep this situation from plaguing you.
What’s an “Automatic Stay”?
In most bankruptcy cases, you can stop creditors from chasing you and your assets. Whether you file Chapter 7 or Chapter 13 bankruptcy, an automatic stay is generally what you get in return for filing the case.
Are there exceptions to this “Automatic Stay”?
There are some narrow exceptions that only apply to a certain set of creditor and their actions. However, we will be discussing a different type of “automatic stay” exception. This can be dangerous to your situation because it might result in you qualifying for an automatic stay. Therefore, your creditors might continue to bother you and your assets as if you had never filed for bankruptcy in the first place.
Have You Previously Filed for Bankruptcy?
This exception WILL NOT APPLY TO YOU if you have not filed a bankruptcy case within the last year that was thrown out by the court. However, there are a few other things that might impact the court’s decision.
Prior to enacting these rules, there was a group of people that would file a series of separate bankruptcy cases in order to use the “automatic stay” to temporarily keep a foreclosure from occurring (or some other sort of action from happening). Therefore, they were found to be taking advantage of the automatic stay, which prompted Congress to create the following two rules:
Rule 1: The “automatic stay” WILL NOT go into effect if you have filed two or more bankruptcy cases and those earlier cases were dismissed by the court if you are currently trying to file a new case. If this is your circumstance, you might be able to keep your “automatic stay” if you meet certain other *criteria.
Rule 2: The “automatic stay” WILL go into effect while filing a new case if you previously filed another bankruptcy case in the past year but it was dismissed. However, the “automatic stay” will expire after 30 days. You might be able to avoid this expiration, but only by convincing your bankruptcy judge that you have met certain criteria.
*The criteria we are referring to is that you have met for imposing or preserving the “automatic stay” that involves justifying why the previous case(s) was (were) dismissed and why you are now currently filing another case. These details are very complicated and beyond what we feel comfortable covering in such a short blog. Please reach out to Brad Woolley Bankruptcy Law Offices for guidance on this matter at (765) 420-8900.
Make Sure There Are No Prior Recent Bankruptcy
Our advice is to be wary because sometimes people don’t remember or realize why the case was dismissed when they file a case for bankruptcy. If someone were to file a bankruptcy case without an attorney and they didn’t complete it for whatever reason, their case will be dismissed. Also, let’s say someone does decide to hire an attorney and the case is filed but for whatever reason, the case is dismissed. So when these people try to file a case later in the year, they don’t always understand that a case was filed and dismissed.
Call the Bankruptcy Law Office of Brad Woolley at (765) 420-8900 if you realize that you have filed a case in your name in the last 365 days.