I often equate the automatic stay to a shield or force field around a debtor who has filed for bankruptcy. The automatic stay is an injunction which prevents or halts creditors from taking any further action against you. In essence, once the stay is in effect, creditors are stopped dead in their tracks from collection activities. Foreclosures are halted, repossessions, wage garnishments and lawsuits are also stopped. This is an extremely powerful tool for any individual who chooses to seek bankruptcy protection.
Collection agencies and bill collectors are well aware of the punishment for violating the stay. If a creditor has violated the stay than the debtor could get damages and attorney fees. If the debtor can prove the action of the debt collector was “willful” than the court can also award punitive damages. Punitive damages are damages which are intended to deter the defendant from engaging in similar conduct.
The next obvious question is how long does the protection from the automatic stay last. Often, the automatic stay lasts for the entire duration of a debtors bankruptcy. However, sometimes creditors who want to enforce their rights file for a “motion for relief of the automatic stay.” Typically, mortgage lenders file for such relief and enforce foreclosure proceedings once the stay is lifted. This assumes, however, that their is a legitimate reason for the foreclosure to continue. Many times, an attorney can successfully argue before the bankruptcy judge to keep the stay in effect. Depending on your unique situation it is imperative to have an experienced bankruptcy attorney enforce your rights and keep you protected under the automatic stay.
If you have any questions contact an experienced bankruptcy lawyer at Sky Law Group today!
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