Role of the Automatic Stay in St. Paul Bankruptcy

One of the strongest protections in the bankruptcy code is the automatic stay. The moment you file either Chapter 7 or Chapter 13 bankruptcy, the automatic stay instantly protects you from any efforts to collect on your debts. As soon as they are aware of your filing, creditors are barred from attempting to recover what you owe or even contacting you about your debt.

If you have questions about the role of the automatic stay in St. Paul bankruptcy, now is a good time to ask. Our dedicated bankruptcy attorneys can provide you with answers and help you navigate the process of erasing your debts. To learn more about how we can support you, schedule a free consultation with our team today.

What Is the Automatic Bankruptcy Stay?

The automatic stay is one of the most powerful protections you receive when you file for bankruptcy. The moment you file your case with the court, the stay goes into effect by operation of law. You do not need a separate order from a judge to halt all of the collection activities against you. In St. Paul bankruptcy cases, the primary role of the automatic stay is to give you time and space to deal with your debts.

Once the stay is in place, creditors have to end most collection activity right away. This includes collection calls, lawsuits, wage garnishments, bank levies, and foreclosure or repossession actions. If a creditor has previously sued you, they will have to pause the legal action for as long as the stay is in effect.

The stay applies to nearly all creditors, from credit cards to medical bills. However, the stay is not unlimited. There are still some creditors that can pursue your assets despite the bankruptcy filing, including child support orders.

How Long Will the Automatic Stay Last?

The length of the automatic stay depends on the type of bankruptcy you file and your filing history. In a typical Chapter 7 case, the stay remains in place until your debts are discharged or the case is closed. In Chapter 13, the stay usually lasts for the duration of your repayment plan, which can run three to five years.

If you have filed for bankruptcy before, the timeline can change. A second filing within one year may limit the stay to 30 days unless you ask the court to extend it. If you have had multiple recent filings, the stay may not go into effect at all unless the court approves it. A St. Paul bankruptcy attorney can explain the role an automatic stay will play in your specific case.

How Creditors Avoid the Stay

In St. Paul bankruptcies, the role of the automatic stay is to protect you from creditors, but that does not mean they are out of options in your case. Creditors cannot ignore the automatic stay, but they can ask the court for permission to move forward with collection efforts. This is done through a motion for relief from the stay.

If the court agrees, it may lift the stay for that creditor. Once lifted, the creditor can resume foreclosure, repossession, or other collection actions related to that debt. This is most common in cases of secured creditors who have a lien on property, such as a vehicle or a home.

In some cases, creditors argue that the property has no equity or that it is not necessary for your financial reorganization. Others may point to repeated bankruptcy filings as a reason to limit protections.

Call a St. Paul Bankruptcy Attorney About the Role of the Automatic Stay

If you are still unsure about the role of the automatic stay in St. Paul bankruptcy, our team of attorneys is here to help. We can explain what it means for your case and how it protects you from creditors. Contact Walker & Walker Law Offices, PLLC today to schedule your free consultation and learn more.