The Automatic Stay

One of the most common concerns of those facing bankruptcy is whether they’ll be able to keep their homes. Fortunately, bankruptcy triggers what’s known as the “automatic stay.” Continue reading to learn more about the automatic stay and how it can help your situation, and contact our skilled Gilette bankruptcy lawyers for assistance through every step of the bankruptcy process today.

What is the Automatic Stay?

The automatic stay is one of the most powerful protections available to individuals filing for bankruptcy. When you file for bankruptcy, whether under Chapter 7 or Chapter 13, the court issues an order called the automatic stay. This order immediately halts most collection actions from creditors. Its purpose is to provide debtors with breathing room—a chance to regroup and work through their financial situation without the constant pressure of harassment or looming legal actions from creditors.

The automatic stay stops a wide range of creditor activities, including:

• Foreclosure Proceedings: If your home is at risk of foreclosure, the automatic stay can temporarily halt the process, giving you time to explore your options for keeping your property or restructuring your debt.
• Wage Garnishments: Creditors cannot continue garnishing your wages once the automatic stay is in effect. This allows you to retain more of your income to address essential expenses.
• Collection Calls and Letters: The stay prevents creditors from contacting you through phone calls, emails, or other communication channels to demand payment.
• Lawsuits and Judgments: Any pending lawsuits related to debts or judgments are put on hold, preventing further escalation.
• Utility Disconnections: If you’re behind on utility payments, the automatic stay can stop disconnection of services like electricity, gas, or water.

However, there are certain exceptions to what the automatic stay can block. For instance, it does not stop actions related to child support or alimony payments, criminal proceedings, or certain tax obligations.

How Long Does the Automatic Stay Last?

The duration of the automatic stay depends on the specifics of your bankruptcy case and your financial history. For most individuals filing for bankruptcy, the automatic stay remains in effect throughout the bankruptcy process, unless a creditor successfully petitions the court to lift the stay. Below are some common scenarios regarding the length of the automatic stay:

• First-Time Filers: If this is your first bankruptcy filing, the automatic stay typically lasts until your case is resolved. For Chapter 7 cases, this means it generally remains active until your debts are discharged or the court closes the case, often within a few months. For Chapter 13 cases, the stay may last for the entire duration of your repayment plan, which could span three to five years.
• Repeat Filers: If you’ve filed for bankruptcy within the past year and had a prior case dismissed, the automatic stay may only last for 30 days unless you request an extension and show the court that your current filing is made in good faith.
• Multiple Filings: If you’ve had multiple bankruptcy filings dismissed in the past year, the automatic stay does not take effect automatically. In such cases, you’ll need to petition the court to reinstate the stay and demonstrate that your case is legitimate.

It’s also important to note that creditors can request relief from the automatic stay if they believe their interests are being unfairly harmed. For example, a mortgage lender may ask the court to lift the stay if you are unable to make ongoing payments for your home.

Contact Our Gillette, Wyoming Bankruptcy Lawyers

If you’re ready to put a hold on all creditor actions and clear away your dischargeable debt, please don’t hesitate to contact the bankruptcy lawyers here at 307 Bankruptcy today. We stand ready to effectively represent your interests and help you attain the peace of mind you deserve and need.