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The Automatic Stay
When you file for bankruptcy, there is a court order that goes into effect to prevent the collection of existing debts or foreclosing properties. This order is known as the Automatic Stay. The Automatic Stay gives the debtor time to plan his or her liquidation or reorganization of assets, in order to begin repaying the debts that they owe. For many people filing for bankruptcy, this is a necessary reprieve from calls and letters of debt collection. However, remember that there are some exceptions to the stay, such as ongoing support.
Since the stay begins as soon as you file the bankruptcy, there may be instances in which a collection agency continues to call or send letters after the fact. In many cases, this is an unintended violation of the court-ordered stay. But in some cases, collection agencies are malicious. They may still attempt to leverage a lien that they have for a property or list of properties. A very common example is the continuation of debt calls from a collection agency. This despite the stay that is in place.
In such a case, it is vital that the debtor gets all available information about the attempts by the collectors to violate the stay.
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There are very clear rules as to how a debtor and their attorney can prevent these acts. In addition, they can bring to justice any collectors that violate the stay. A debtor can file an adversary proceeding to bring the court into the matter, and force the collector to respect the stay for the remainder of the order.
If you have questions about the Automatic Stay, feel free to contact us here at Littlefield Law. Our team is familiar with all the available applications of a stay, and the limitations as well. So, don’t leave your bankruptcy process to chance. Get an attorney on your side that knows the law better than anyone else in the Dallas area. Best of all, get a lawyer that will keep you informed and gets a positive result when it really matters. Call us for a consultation today to discuss your options and how to proceed.
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