11 USC § 362 – The Automatic Stay
Filing bankruptcy instantly and automatically invokes the Automatic Stay, one of the most powerful Federal Injunctions instantly available to debtors. Like the flick of a switch, the invocation of the Automatic Stay will instantly stop a threatened foreclosure, bank levy, wage garnishment, auto repossession, or lawsuit. All creditors must abide by the Automatic Stay and must cease all further communications with you. No more phone calls. No more collection activities. No more harassment! Ordinary creditors may take no further action against you or your property without first presenting and prevailing on their request for relief from the stay to a Bankruptcy Judge. Even then, Relief from Stay Motions are typically filed in connection with property you intend to surrender anyway, such as a car or home you no longer want. Hearings usually take place thirty days from the date the Motion was filed. If you do not intend to keep the property, you typically will not need to attend.
There are some proceedings the stay will not affect, such as paternity proceedings, child custody hearings, establishment or modification of domestic support obligations, and criminal proceedings. Special rules apply if you have had a recently dismissed bankruptcy case.
Creditors who knowingly violate the Automatic Stay are creating “Stay Violations” which are actionable under Federal and State Laws. Doan Law Firm treats knowing Stay Violators very severely. One legitimate Stay Violation can result in a monetary recovery to the debtor in an amount which exceeds the original cost of their bankruptcy! So, it is usually never a bad thing if a creditor knowingly chooses to defy the laws of the United States of America in an attempt to collect a debt.