When you meet with your bankruptcy attorney in Kennesaw and work up the paperwork to file for bankruptcy, once the paperwork is filed, the court issues what is called an automatic stay. With the exception of very few debts, an automatic stay immediately stops all collection efforts that creditors are making as well as suspending any wage garnishments that are in place.
What a stay will not stop from occurring
There are a few collection efforts that are not stopped by an automatic stay including collection of child support and property tax liens. In addition, if you are a renter and your landlord has already secured a judgment, an eviction cannot be stopped. Criminal restitution payments and loans from your retirement accounts will also continue as scheduled regardless of whether you have filed bankruptcy.
What good does a stay do?
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Homeowners who are facing foreclosure can gain some additional time by filing for bankruptcy. If your bankruptcy lawyer in Kennesaw, GA has filed bankruptcy on your behalf, your lender must go to the court to request the stay be lifted in order to foreclose on your home. Keep in mind however, if a foreclosure sale is already scheduled, filing for bankruptcy may not prevent the sale depending on the scheduled date.
Automatic stays and wage garnishment
Wage garnishments occur when a creditor obtains a judgment against you and withholds part of your wages to satisfy the debt you owe. However, when you file bankruptcy, the wage garnishment must be stopped which allows you to collect 100 percent of your wages until such time as the court determines the garnishment should proceed or until your bankruptcy is settled. Wage garnishment for repayment of support may not change even if you are filing for bankruptcy. Make sure when you meet with your Kennesaw bankruptcy attorney that you advise them of any wage garnishments so your employer is properly notified of the bankruptcy filing.
Other uses for an automatic stay
In some cases, recipients of public benefits have received over payment as a result of something other than deliberate fraud. In many cases, the agency you are collecting benefits from has the right to dock your future benefits for these overpayments. However, an automatic stay prevents the collection of over payments. It will not stop a benefit denial or suspension of benefits however.
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Another potential use for an automatic stay is a suspension of public utilities. For example, let’s assume you were unable to pay your electric bill for several months and are being threatened with a shut-off. Once the utility company has been notified you have filed bankruptcy, they may be unable to suspend your service. There may be a time limit such as 20 days which may be sufficient time to allow you to pay your past-due bills.
It is important when you meet with your bankruptcy lawyer in Kennesaw, GA that you provide them with all of the necessary information regarding past due bills. If you have wage garnishments, a mortgage foreclosure notice or an eviction notice, advise your attorney immediately so the proper parties are notified of your status once the bankruptcy filing is completed. If you have any bankruptcy questions, call Roger Ghai, a bankruptcy attorney in Kennesaw at the Law Offices of Roger Ghai at (770) 792-1000.