When you file for bankruptcy, something called the “automatic stay” goes into immediate effect. The automatic stay works to halt all collection efforts by creditors, including collection calls, letters, wage garnishments, home foreclosures, car repossessions, and more. The stay remains in effect for qualifying debts for the duration of your bankruptcy case. As you can imagine, this block against collections can provide immediate and lasting relief for a person who has been unable to pay bills, constantly dodging harassing collectors, and fearing losing their home or vehicles.
Though the automatic stay is powerful against creditors, it does not halt every type of collection. For example, the automatic stay will not apply for the following legal actions:
- Criminal charges or traffic violations
- Divorce proceedings
- Paternity suits
- Child support or child custody actions
- Spousal support, alimony, or maintenance
- Domestic violence civil cases
- Tax collections by the IRS (for non-dischargeable taxes)
- Evictions (under certain circumstances)
Additionally, some secured creditors may file a motion for the court to lift the automatic stay in regard to their debt. If the court decides to lift the stay, which often happens, repossession may occur. However, you may work with the creditor and sign a reaffirmation agreement, which states that you will not include that debt in the bankruptcy and will instead pay that debt in exchange for keeping the property.
The court should send notices to all of your creditors informing them that an automatic stay has gone into effect. However, this could take some time, so you may want to notify them of your bankruptcy on your own if any repossession efforts are currently underway. An experienced bankruptcy attorney can help you deal with your creditors to make sure they are aware of the automatic stay. If a creditor violates the automatic stay, you may bring action in court to enforce it. If you are successful, the court will penalize the creditor and any repossessed property will be returned to you.
Contact a St. Louis Bankruptcy Lawyer for assistance
The Missouri bankruptcy attorneys at the Law Offices of Kenneth P. Carp are dedicated to helping St Louis residents get back on their feet. If you are considering bankruptcy, call our office at 636-947-3600 for help.