How Does an “Automatic Stay” Work in Pennsylvania?

Automatic stays are one of the major benefits of filing for bankruptcy in Pennsylvania. Let our lawyers explain the ins and outs of this feature of bankruptcy and help you keep the automatic stay in effect throughout your entire case.

Automatic stays work by prohibiting creditors from continuing lots of debt collection activity. That includes garnishing your wages, filing lawsuits against you, and repossessing your vehicle. Automatic stays should last throughout bankruptcy unless this is your second filing within the year or a creditor successfully motions to lift the stay, which we can help avoid. Tell us about any contact from creditors, as violating the automatic stay comes with serious consequences.

Get a free case review from our Philadelphia bankruptcy lawyers when you call Young, Marr, Mallis & Associates today at (215) 701-6519.

How Do Automatic Stays Work in Pennsylvania?

Generally, an automatic stay takes effect when debtors file for bankruptcy in Pennsylvania. This stay pauses most debt collection efforts, giving you the immediate relief you need when entering bankruptcy.

When the automatic stay takes effect in a case, creditors must stop the following action:

• Wage garnishment
• Foreclosures
• Repossession
• Lawsuits
• Collection calls and letters

Automatic stays do not stop the collection of alimony or child support payments, so keep that in mind if these debts are part of the reason for filing your bankruptcy case.

Before filing for bankruptcy, creditors might garnish wages, send intimidating collection letters, or even threaten to repossess your vehicle or foreclose on your home. Filing for bankruptcy alone triggers an automatic stay, signaling to creditors that they must stop contacting you about repaying debt outside of the bankruptcy case.

Automatic stays are relatively straightforward, though many debtors don’t realize they are part of filing for bankruptcy. Let us use the automatic stay in your case to your advantage, as well as all the other beneficial aspects of bankruptcy.

How Can Debtors Use the Automatic Stay in Pennsylvania?

When an automatic stay goes into effect in a bankruptcy case, it gives debtors time to take a breath, evaluate their financial situation, and make a plan to address it. We utilize this period effectively by reviewing all debts, listing creditors, and determining the best course of action forward.

If you file Chapter 7, we may use the automatic stay to identify which of your assets we will liquidate to repay creditors. If you file Chapter 13, we can use the period immediately following the automatic stay’s effective date to create your repayment plan, which we must submit to the court soon after filing for approval.

Do Automatic Stays Always Last Throughout Bankruptcy?

First-time bankruptcy filers always qualify for an automatic stay in Pennsylvania. The automatic stay typically remains in effect throughout the entire bankruptcy case, although there are circumstances under which it may end prematurely.

Repeat Filings

If you’ve filed for bankruptcy previously in the past year and the case was dismissed, an automatic stay may only last for 30 days. Our Stroudsburg, PA bankruptcy lawyers can motion the court to extend the automatic stay in this scenario, explaining why you deserve extended relief from debt-collection actions.

You don’t get an automatic stay without successfully motioning for it if you have two or more cases within the past year that were dismissed and refiled.

Motions from Creditors

Mortgage and car lenders with liens on debtors’ property often motion to lift automatic stays. If their motions are successful, creditors may pursue vehicle repossession or mortgage foreclosure, even if the bankruptcy case is still happening.

Creditors with ongoing litigation against debtors might also file motions to lift automatic stays; in such cases, we can help keep stays in effect.

Judges may also grant motions to lift automatic stays if debtors fall behind on payments during bankruptcy or fail to fulfill other obligations. Let us handle your case, craft your repayment or liquidation plan, and fight against unfair motions to lift an automatic stay.

Failure to Submit Statement of Intention

In Chapter 7 bankruptcy cases, petitioners must submit a Statement of Intention explaining how they play to repay secured debts. You have the earlier of 30 days from filing your bankruptcy petition or by the first date of the meeting of creditors to submit the Statement of Intention or the automatic stay in your case gets lifted. However, our lawyers may motion to extend it.

Whether you bring a Chapter 7 bankruptcy or a Chapter 13 case, we can create a plan to address your debt before we file. That way, we are prepared for additional filing deadlines throughout the case and avoid common roadblocks to resolving cases.

Case Dismissals

If your bankruptcy case gets dismissed before all debts are repaid or discharged, the automatic stay is lifted. If you still owe debts to creditors, they might resume collection tactics. This includes wage garnishment, mortgage foreclosure, vehicle repossession, and other similar actions.

Call us if your case gets dismissed in Pennsylvania, and we can refile a successful bankruptcy petition on your behalf.

How Do I Know if a Creditor Violated an Automatic Stay?

Creditors can face serious consequences for willfully violating an automatic stay in Pennsylvania. Attempts to contact you for repayment outside the bankruptcy case may constitute automatic stay violations, so tell us immediately.

Continuing wage garnishment, lawsuits, foreclosures, repossession, or initiating this activity once an automatic stay is in effect violates it. Tell us about any letters, phone calls, or other communication attempts from creditors, and give us any documentation you have of such contact.

For automatic stay violations, creditors may be required to pay damages to the debtor and face court orders to cease their actions. They may even lose their right to seek repayment.

Willful violations differ from technical violations, which our lawyers can differentiate. We can bring violations to the court’s attention. If you’re unsure whether or not a creditor has violated the automatic stay, tell us what happened, and we can determine if they have.

Call Our Bankruptcy Attorneys in Pennsylvania Now

Get a free case assessment from our West Chester, PA bankruptcy lawyers and call Young, Marr, Mallis & Associates at (215) 701-6519.