Archive

Posts Tagged ‘Automatic Stay’

Following Through On Your Bankruptcy

March 28, 2014 Comments off

The decision to file or not to file a bankruptcy can be stressful and overwhelming.  Many attorneys offer free consultations to get to know the prospective client’s situation to better be able to counsel them in making a proper, informative decision.  If you and your attorney decide that a bankruptcy is beneficial to you and your situation then you would next pay a retainer fee to get your case started.  This article stresses the importance of following through with the bankruptcy and getting it filed as soon as possible.

Clients come into my office for a reason.  Maybe they are overwhelmed by their growing debt, perhaps they are annoyed with the phone calls, and in many cases they have already been sued and are currently having their wages garnished.  Things do not automatically get better when you pay an attorney a retainer, leave his office and then forgot about finishing off your case.  Your creditors need a case number.  That is the only thing that is going to stop a garnishment or the risk of being sued and being dragged into court to defend yourself.  Once you have this case number creditors are forced to leave you alone.  They will no longer be able to call you.  They will no longer be able to sue you.  And, most importantly, they will no longer be able to garnish your paycheck.  

Some clients will pay some money down, leave my office and I will not hear from them again.  Then, one day, they get served with papers from a process server to appear in court and then remember they were going to file a bankruptcy.  Now it is a year later, you still have only paid a small down payment towards your case and you have put 25% of your paycheck at risk because now you have a lawsuit you have to defend.  It is just not worth it.  If you start your case then you started it for a reason.  It is very important you complete the process.  

Filing bankruptcy is an important decision and should not be taken lightly.  We offer free consultations in 6 different locations in Missouri and Illinois.  Please do not hesitate to give us a call at 636-916-5400 if you have any questions regarding this issue or anything else related to bankruptcy.  We are also now currently taking traffic cases and family law cases in the St. Louis area.  

Should I Convert My Bankruptcy Case?

August 27, 2013 Comments off

This question may not initially be on the mind of a prospective client when they come into your office, but the situation does come up from time to time when it is in the best interest of the client who originally started their bankruptcy as a Chapter 13 to convert that case to a Chapter 7.  With that said, it is not always the best decision to make and that is why an experienced bankruptcy attorney will be extremely helpful in this process. 

                                          

The question of when to convert sometimes comes up and the answer is laid out in Section 1307(a) of the Bankruptcy Code.  Assuming you have not previously converted your case from another chapter and are eligible to file a Chapter 7 (based on income or prior filings), you can convert a Chapter 13 case to a Chapter 7 case at any time, for any reason. 

 

The question of why you would want to convert is a complicated one.  Some common reasons why debtors want to convert are an inability to make their monthly plan payments to the Trustee, an inability to make mortgage or car payments, or, often times it is just a desire to have their case completed in less than 3-5 years, which is required through a Chapter 13.  If the Trustee is not getting paid by the debtor in the Chapter 13, they will file a motion to dismiss the case.  If this occurs and the debtor cannot become current the case will be dismissed.  If this happens, the automatic stay is lifted and all of the creditors will begin trying to collect as they were before the bankruptcy filing. 

 

Some people file Chapter 13 cases because they are behind on their car payments or mortgage.  You are required to continue making payments on these secured debts during your bankruptcy.  If you fall behind on them, the creditor will file a motion for relief with the court.  If you cannot pay for these any longer and are too far behind to catch up, the motion will be granted and the creditor can start either foreclosure or repossession.  If the decision is made to surrender your vehicle or car, it might be a good idea at that time to convert to a Chapter 7.  The Chapter 7 will erase or “discharge” any deficiency left on the loan or mortgage after they are sold at auction. 

 

Conversions are easy for experienced attorneys.  The attorney will file a motion to convert with the Court and the Court will enter a Conversion Order after a few days.  The attorney will file a few amended schedules, per the local rules, with your motion to convert and he or she can also advise you of any refund you may get from the Chapter 13 Trustee based on what has been sent out to your creditors.  Upon conversion, you will have another 341 Meeting (or Meeting of Creditors).  At this time, you will also be able to add any new debt you have incurred since your Chapter 13 case was filed. 

 

Conversions often make sense, but it is a good idea to consult with an attorney before doing so.  If it is done at the wrong time it can lead to problems, which the attorney can discuss with you.  We offer free consultations at several different locations in the St. Louis area.  If you would like to speak to an experienced bankruptcy attorney, please give us a call today.  

22 June, 2012 22:41

June 22, 2012 Leave a comment

Generally when a debtor files for bankruptcy there is an automatic stay.
There are a few circumstances where the stay might be for a limited time
period or not automatic at all. This is usually when a debtor has recently
had a pending bankruptcy case. It is important that you inform your
attorney of all prior bankruptcies so that he/she can determine whether any
additional motions need to be filed.

The protection of the automatic stay, explained in Section 362 of the
Bankruptcy Code, provides protections for individuals filing for bankruptcy
from garnishments, bank account freezes, repossessions, and foreclosures.
If you are aware of an immediate threat of any of these issues you should
inform your attorney. He/she may take additional steps, including sending
a fax to the attorney handling the collections, to notify that individual
as quickly as possible that you have filed a bankruptcy.
If you are facing a foreclosure you should speak with an attorney as soon
as possible. Filing for bankruptcy can stop a foreclosure, but only if the
bankruptcy is filed before the house is foreclosed. If the threat of
foreclosure is immediate your attorney can file an emergency petition.

Basically, this provides enough information to stop the foreclosure. Over
the next 14 days you and your attorney will need to provide the court with
the rest of the required information to complete your bankruptcy filing.
If you are facing a repossession you need to consult an attorney and file
your bankruptcy as soon as possible. The emergency option, as discussed
above, is available in this situation also. However, in the case of
vehicles, it may be possible to have a vehicle returned after it has been
repossessed. There is a very limited time to have your car returned and to
have the vehicle returned you will have to pay fees incurred, potentially
including towing and storage fees.

If you are facing a garnishment you can file for bankruptcy to stop the
garnishment. As a practical matter sometimes checks are garnished after
the filing date because garnishments are often automatic and it may take a
few weeks to stop them. If this happens you are entitled to a refund of
any money garnished after your case is filed. Unfortunately, nothing can
be done to recover funds from before your case is filed.

If you have questions, or would like to schedule a consultation, contact a
St. Louis Bankruptcy Attorney Today.

THE AUTOMATIC STAY – BANKRUPTCY PROTECTION

This is guest article by Attorney Adam Schachter, a bankruptcy attorney in Houston Texas.

What is an Automatic Stay

As soon as a bankruptcy is filed, with a couple of narrow exceptions, something called the “automatic stay” goes into effect. The automatic stay is found in the bankruptcy code at 11 U.S.C. § 362(a) and it stops most collection efforts. Once a bankruptcy is filed, the automatic stay prevents repossessions and foreclosures and stops lawsuits. It ends the harassing phone calls and letters and provides an immediate sense of peace.

The automatic stay is one of the greatest benefits of filing bankruptcy. Its purpose is to give the debtor in bankruptcy a break from the seemingly endless efforts of collectors. This break is to give the debtor an opportunity to regroup and get the best chance at a fresh start.

Once a creditor has notice of the automatic stay it MUST abide by it. It is not allowed to continue calling or sending bills. It cannot take property from you. If a creditor is found to be in violation of the automatic stay by the court, you may be entitled to damages as well as payment of your legal fees. What is key is that you are able to prove that the creditor violating the stay had notice. Hence it is very important to make sure that the creditor addresses used in your bankruptcy filing are correct. Be sure to work closely with your lawyer to get it right.

Automatic Stay is not always Automatic

11 U.S.C. § 362(a) of the bankruptcy provides an automatic stay against all sorts of collection activity.

Note that the automatic stay is not always automatic. If you filed a bankruptcy that was dismissed by the court in the 12 months prior to filing another bankruptcy, the automatic stay is good for only 30 days. A motion must be filed to extend the stay past 30 days and you must be able to show that the circumstances that caused the dismissal of the previous case has changed such that this case will be successful. If you had 2 or more bankruptcies dismissed in the twelve months prior to filing another bankruptcy, there is no automatic stay. You must file a motion to have one imposed and also show that the circumstances of the prior cases have changed such that the present case should be successful.

If you find yourself in this situation we believe you need to brutally honest with yourself regarding whether bankruptcy is right for you and whether your case can be successful.

Exceptions to the Automatic Stay

11 U.S.C. § 362(a) of the bankruptcy code provides an automatic stay against all sorts of collection activity. What a lot of people (including many attorneys) don’t know is that there are 27 exceptions to the automatic stay found in 11 U.S.C. § 362(b). Now before you jump to conclusions in think the automatic stay is not as great as we’ve mentioned, understand that most of the exceptions make good sense and 16 of them almost never apply to every day people.

The common exceptions that affect every day people are:

The automatic stay does not stop criminal proceedings

It does not stop most family court proceedings

It does not stop the assessment of taxes or audits

It does not stop the payroll deduction of repayment of a 401k or similar loan

It does not stop an eviction if the order of eviction has already been signed

One important note that many people are not aware of is 11 U.S.C. § 362(b)(11): the automatic stay does not prevent the presentment of a negotiable instrument. “Negotiable instrument” is lawyertalk for “cashing a check.” This could be a big deal, especially if you have payday loans or other loans where collectors have asked you to give them a signed check. If you are in this situation, it’s best to simply close that particular bank account prior to the bankruptcy filing.

%d bloggers like this: