No, the protection of the automatic stay is not permanent. Once the Chapter 7 bankruptcy case is over, the stay is lifted and any remaining creditor may engage in activities that would otherwise be precluded by the stay. However, if done correctly, most debt will have been discharged in the course of the case. The only creditors remaining would be those whose debts are not dischargeable in bankruptcy, or those with whom you have reaffirmed your obligations (see reaffirmation).
Yes. In some instances a creditor will request relief from the stay by filing a motion with the bankruptcy court. The court has relatively broad judgment to grant the request if it believes that doing so will serve the purposes of justice, or at times when the debtor has zero equity in in the property at issue. Creditors, however, need to tread carefully, since filing a frivolous request for relief from the stay could in itself be considered a harassing violation of the stay, and subjecting them to sanctions by the bankruptcy court.
Whether you are contemplating Chapter 7 or Chapter 13 Bankruptcy relief, you should first speak with an experienced Annapolis bankruptcy attorney that can approach your situation comprehensively.
Contact Schifanelli Law, LLP at 410-263-0028 for an initial consultation with a Lawyer in Annapolis.
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The Automatic Stay
Creditors and collectors can be relentless: calls, emails, and any other way they can get in touch with you to resolve your outstanding balances. What they don't seem to get is that most people, if they could, would make their payments. But when times are tough and the amount that you owe each month is much more than you are making, it soon becomes impossible to pay everyone. Meanwhile, the interest and penalty fees continue to compound. At some point, legal action and collections are implemented, including civil litigation and garnishments from your paycheck. Temporary protection from these actions so that you and your Annapolis bankruptcy lawyer can determine how to get you financially stable again is part of the purpose of bankruptcy relief.
And the first relief that most of our clients notice after they file for Chapter 7 bankruptcy in Maryland is the cessation of the incessant calls, emails, and texts; and the mailbox is noticeably roomier after the mailman delivers. These are the result of the automatic stay to which creditors must adhere or face court imposed sanctions, including contempt and possibly fines. The stay precludes creditors from engaging in behavior that creates pressure on the debtor after she has filed her petition. This includes, among other things, harassment via the telephone or any other means of communication. It allows the debtor to have some time to contemplate her future financial and economic stability.
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Individuals who file for Chapter 7 bankruptcy relief in Maryland are protected by the automatic stay. The stay is very broad in regards to what your creditors may not do after notice of the bankruptcy filing. The stay precludes a creditor from filing an action in court to recover property or money, or from pursuing an action if one is already filed against you. This includes actions in civil courts, administrative courts, or in arbitration (criminal cases, however, are not stayed). The automatic stay also covers pre-petition judgments (court orders that were issued before you filed for Chapter 7 bankruptcy), including wage garnishments or bank account garnishments.
The stay also stops any attempt by a creditor to repossess or otherwise exercise control over property owned by you at the time you file a Chapter 7 bankruptcy petition. For example, if you own a car and their is a lien on it by the finance company, and you have failed to make your monthly payments, it would be a violation of they stay (i.e. federal law) for the finance company to attempt to repossess it.
Many other actions are stayed. Contact an Annapolis bankruptcy attorney at Schifanelli Law, LLP to discuss.