Will the Automatic Stay Permanently Stop Debt Collectors?

When you are thinking about consumer bankruptcy, you may know that the automatic stay is one of the most powerful tools in a personal bankruptcy case. The automatic stay is an injunction that applies as soon as you file for bankruptcy, and it stops debt collectors and creditors from continuing to take any actions against you designed to collect on the debts you owe. This means a creditor cannot call you to try to collect the debt once the automatic stay applies, and a creditor cannot file a lawsuit against you, garnish your wages, or initiate or move forward on home foreclosure. In short, the automatic stay stops creditors and debt collectors from collecting the debt you owe. Yet you might be wondering: how long will the automatic stay remain in effect? And can the automatic stay permanently stop debt collectors from taking action against you? Our Oak Park bankruptcy attorneys have information to help you.

Automatic Stay Will Remain in Effect Until Your Bankruptcy Case is Closed

How long will the automatic stay remain in effect? In short, it will remain in effect for the length of your bankruptcy case unless it is lifted for a particular creditor (which we will explain in more detail below). According to Debt.org, that means the automatic stay will last for anywhere from three to five months for a Chapter 7 bankruptcy case on average and anywhere from three to five years on average for a Chapter 13 bankruptcy case. Those are the average lengths of Chapter 7 and Chapter 13 bankruptcy cases, respectively.

Limitations for Previous Bankruptcy Filings

While the automatic stay is designed to last for the life of your bankruptcy case, it is important to know that there are some limitations. In general, if you file for bankruptcy more than once in a calendar year, the automatic stay could be limited to just 30 days in order to prevent debtors from filing for bankruptcy and then withdrawing their petition solely for the benefit of the automatic stay. Having filed for bankruptcy multiple times in the recent past without receiving discharges could result in an elimination of the automatic stay.

Effects of the Automatic Stay Can Be Lasting

While the automatic stay will not permanently apply to stop debt collectors directly, it can have that effect. For Chapter 7 cases, the automatic stay will apply until your debts are discharged. At that point, creditors and debt collectors cannot collect on those debts. The same is true for a Chapter 13 case.

Creditors Can Have the Automatic Stay Lifted Under Some Circumstances

You should be aware that some creditors can, in certain circumstances, file a motion for the bankruptcy court to lift the automatic stay. Typically, this will only occur in cases involving secured creditors where the creditor can prove that they will be harmed if the automatic stay is not lifted.

Contact an Oak Park Bankruptcy Attorney

If you are considering the possibility of filing for bankruptcy and you have questions about the automatic stay, you should seek advice from an experienced Oak Park bankruptcy lawyer. An advocate at our firm can provide you with more information about how the automatic stay will apply to your specific case, and we can help you to understand how the automatic stay may be able to stop a foreclosure if you are behind on your mortgage payments. Do not hesitate to get in touch to learn more. Contact the Emerson Law Firm today.



See Related Blog Posts:

Can I Be Forced to File for Bankruptcy?

Absolute Priority Rule: What to Know

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