25.3 C
New York
July 25, 2024
V Team Law – Find The Best Lawyer For You – Get Tips
Law

Using Automatic Stay to Stop Creditors’ Claims

To help people who are in financial difficulties rebuild their finances, the federal bankruptcy code was created. An order commonly called “automatic stay” is one of the most powerful tools. It’s designed to ensure that all creditors are treated equally by the bankruptcy petitioner. The automatic stop was created to make sure that no creditor can take advantage of another creditor once the bankruptcy petition has been filed. This is how it works.

The Basics

A stay is a judicial order issued to prevent one or more parties from taking the actions listed in the stay order. The clerk prepares a stay order for all creditors that are identified in the bankruptcy petition. All creditors are instructed to immediately stop any attempts to collect the debtor’s claims by the stay order. The stay applies to the “initiation or continuation,” including the issuance of or employment of process against the debtor.

There Are Exceptions

Certain types of debt are exempted from the effects of the automatic stay language. These include claims for past due child support, alimony, taxes, and actions to establish paternity or resolve child custody issues.

Conclusion

Because it prevents any action from foreclosing residential mortgages, the automatic stay offers debtors protection. It also helps debtors keep their family home. The bankruptcy code has many exceptions to the automatic stay’s effect.

This post was written by Trey Wright, one of the best bankruptcy lawyers in Jacksonville FL! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, specializing in bankruptcy law, estate planning, and business litigation.

The information provided on this website does not, and is not intended to, constitute legal advice; all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user, or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.

Related posts

What Is Business Law?

Humbert Poul

How Does Compensation Attorney Work For Labours?

Humbert Poul

What Are The Benefits Associated With The Green Card?

Humbert Poul