This article is about the automatic stay in bankruptcy. This is one of the things that an individual or a company filing bankruptcy really wants, and this is the part of the law that says that on the filing of a bankruptcy petition, all collection activity has to stop. All creditors have to stop what they’re doing to collect debts. They can’t call for money, they cannot send statements or demands, they can’t sue, and in most cases, they can’t file liens.
The automatic stay is automatic. It happens as soon as a petition is filed. If you ignore the automatic stay and take some of those actions, you’re interfering with the bankruptcy process and you may be held accountable. You could be held in contempt of court and could be made to pay damages for violating the automatic stay. You may be thinking, if I don’t know about the filing, how can I be bound by the automatic stay?
The answer is you are bound by ut but in order to be punished for violating it, you have to have notice of it. But there are other ways like you could be having lunch with friends in your industry and they talk about the fact that the debtor filed bankruptcy. That gives you notice of the bankruptcy that binds you to the automatic stay. If you’re noticing any way you’re bound by the automatic stay and can be punished for violating that automatic stay and interfering with the bankruptcy.
The easiest way is the data tells you that she filed bankruptcy. You could also get a notice in the mail from the bankruptcy court of the bankruptcy.
The filing of a bankruptcy in Utah offers an individual immediate protection from virtually all creditor collection efforts. These activities usually include:
The automatic stay under 11 U.S.C 362 provides an immediate and fundamental benefit to an individual in that it gives the individual relief from creditors. It stops all collection efforts, harassment, and foreclosure actions. The automatic stay allows an individual to reorganize and/or to be relieved of their obligations.
In summary, when a debtor files for bankruptcy, an automatic stay immediately goes into effect.
The automatic stay prohibits creditors from continuing with collection activities while the debtor rehabilitates it’s business and negotiates a payback plan with its creditors aside from a few exceptions. If you ignore the automatic stay and take action, you could be held in contempt of court and be made to pay damages. Even if a creditor does not know about the automatic stay, they are still bound by it, but they likely won’t be punished for a violation, whether it’s an official notice or a conversation with a colleague.
There are many ways that you can be given notice of a bankruptcy. You should stop all collection activity immediately or be at risk of a stay violation. Get out of bankruptcy with attorney Ryan E. Simpson.
To get immediate relief from your creditors, contact us by Phone at (801) 432-8682.