Bankruptcy Attorneys in Tacoma
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Tacoma Bankruptcy Attorney

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Tacoma, WA Bankruptcy Lawyers

The Automatic Stay

Filing for bankruptcy protection in Washington State.
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Bankruptcy Attorneys in Tacoma, WA.

How does an automatic stay provide bankruptcy protection in Washington State?

The bankruptcy court automatically enters an order prohibiting debt collection the second you file your case. Phone calls, garnishments, law suits, foreclosures, repossessions, utility cut offs, etc. suddenly stop. The order, known as “the automatic stay”, can result in sanctions against creditors who even attempt to collect a debt from you.

Creditors almost always respect the automatic stay because they could be in serious trouble if they made a practice of violating it. They have to have actual notice to be liable for sanctions. You should make sure their addresses are up to date on your bankruptcy petition. The bankruptcy court mails notice of the stay to your creditors. You can notify them yourself if you need to put them on notice more quickly, as when you need to stop a garnishment or repossession.

How long does the automatic stay protect me from creditors?

The automatic stay is in effect until your bankruptcy closes. It covers more debt collection than the discharge. Student loans, some back taxes, fines and domestic support obligations are not covered by the discharge. The automatic stay covers student loans and back taxes. Child support actions are not covered by the automatic stay. Fines are not covered either. The IRS can continue a tax audit without violating the stay but cannot try to collect from you.

A creditor can ask the court to “modify the automatic stay”. If they persuade the court they have a good reason to continue debt collection, the stay is modified only for that one creditor. Usually that means a car company or mortgage company can continue foreclosure or repossession if you are not keeping up on the payments. They can modify the stay in as little as a month.

The automatic stay concerning Chapter 7 and Chapter 13 bankruptcy.

Modifying the automatic stay is easy in a Chapter 7, though it usually take them a few months. In a Chapter 13, they have to show that your plan won’t work, that you are behind on payments or the property is not insured. Once the stay is modified, they can pursue their rights under state law. You may still have defenses under state law after the stay is modified.

If you have filed a bankruptcy that was dismissed within a year, the automatic stay will only last 30 days. After that you have to show the bankruptcy court that the second case was filed in good faith to keep the stay in effect. If you filed more than one case in the last year, the stay does not take effect and you have to prove good faith to have it imposed. The purpose of this law is to prevent people from filing serial cases that are going nowhere to keep the stay alive indefinitely.

Such abuse in uncommon. In general, the automatic stay is a powerful weapon against aggressive creditors. It allows you to sort out your finances and get a fresh start. Once the stay is in effect, creditors must deal fairly with the bankruptcy court and let the law determine how much they can get.

Call now for your FREE phone consultation with a Tacoma bankruptcy attorney from our team!

We want you to be able to exercise your rights fairly and receive the type of protection that bankruptcy provides. Please contact a Tacoma bankruptcy attorney from our team to set up a free phone consultation to have your questions answered, and to receive the legal counsel that you deserve during these tough financial times!

Tacoma Bankruptcy Lawyers

Tacoma, WA bankruptcy lawyers. Call an experienced Tacoma bankruptcy attorney from our team today to learn more about the automatic stay and other options:

(253) 778-6952