As a bankruptcy lawyer who has assisted hundreds of clients in declaring Chapter 7 and Chapter 13 bankruptcy around Atlanta and the rest of Georgia, I’ve learned that their greatest concerns revolve around their house, their car, and other substantial assets that they’ve acquired over the years. Many of them have sought out a bankruptcy attorney because their houses are in foreclosure, or they’re facing the repossession of their cars or other property. In fact, some are under the impression that they are too late, even though this is usually not the case.
That’s why it’s important to know that the minute that a bankruptcy is filed, the protection is immediate. This is referred to as the “Automatic Stay.” The automatic stay prevents debtors from:
- Starting or continuing a garnishment (deduction of money from wages to pay a debt)
- Starting or continuing a foreclosure
- Starting or continuing a lawsuit against the debtor
- Calling the debtor (A welcome relief for those being pursued by collectors or skip-tracers)
- Sending bills to the debtor
- Repossessing a vehicle
The automatic stay endures until the creditor receives an order from the judge that the stay is lifted. To facilitate this, a creditor may file a motion with the Georgia bankruptcy courts for a motion to lift stay. The protection offered by the automatic stay is not indefinite. In bankruptcy, the automatic stay ends as soon as the case is discharged or dismissed. At that point, any debt that has not been settled can again be pursued by creditors.
It’s also important for Georgia residents who are seeking bankruptcy to know what is not protected by an automatic stay. It is not a way to prevent the continuation of a criminal proceeding; it does not prevent or delay child support obligations; and taxes can still be assessed or offset. In addition to the automatic stay exceptions, if the debtor has previously declared bankruptcy, there is the danger of him or her being declared a “serial filer”—someone who files bankruptcy frequently to avoid the payment of his or her debts. If this is the second bankruptcy filing in a calendar year, the automatic stay only stays in effect for thirty days, and debtor’s bankruptcy attorney must file for an extension.
Regardless of the limitations of the automatic stay, for most people facing a Chapter 7 or Chapter 13 bankruptcy, it can provide immediate relief in an otherwise daunting situation. Before filing for bankruptcy, it is recommended that you speak with a qualified, professional Georgia bankruptcy attorney.