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The automatic stay is an important element in all bankruptcy proceedings. It essentially prevents most creditors from pursuing debts owed by the debtor. This means that the automatic stay prevents all harassing phone calls, letters and any other means of contact. If you want to file for bankruptcy and have creditors harassing you, it is important to contact an experienced bankruptcy lawyer on Long Island who will help you pursue your options in bankruptcy.
Contact the law firm of Andrew M. Doktofsky, P.C. at (631) 673-9600 for a consultation about how the automatic stay in bankruptcy can help you. Call today to discuss bankruptcy and the automatic stay throughout the areas of Suffolk County and Nassau County, New York.
According to the federal Bankruptcy Code, 11 U.S.C. § 362(a), once a debtor has filed for bankruptcy, the automatic stay prevents creditors from pursuing most types of debt collection actions against them. This means a creditor is not permitted to pursue a debtor through any of the following means:
The automatic stay remains in effect until the debtor receives a discharge, at which point the stay is replaced by a permanent injunction that prevents creditors from pursuing collection of all discharged debts.
If a creditor does want to pursue a debt, they must first file a motion in bankruptcy court to have the automatic stay lifted. Once a creditor has filed a motion to terminate, annul, modify or condition the stay, and the court has held a hearing, relief will be granted to the creditor if:
The automatic stay goes into effect immediately when the debtor files for bankruptcy in New York. Therefore, the debtor does not have to do anything to put the stay in place – it is automatic (with certain exceptions described below). The notice of bankruptcy filing that is sent by the Bankruptcy Court to all of the debtor’s creditors informs the creditors that an automatic stay is in effect.
There is an additional automatic stay when an individual files for bankruptcy under Chapter 13 of the Bankruptcy Code. This stay is provided for individuals who are jointly obligated on a consumer debt with the Chapter 13 debtor. The co-debtor stay in Chapter 13 protects co-debtors from collection actions until the bankruptcy case has closed or the creditor obtains relief from the stay.
In addition to preventing harassing behavior by creditors, the automatic stay:
Any of these actions taken in violation of the automatic stay are void, whether or not the creditor has actual knowledge that the stay was in place.
A creditor that willfully violates the automatic stay can be penalized in any of the following ways:
If an individual has previously filed for bankruptcy, different rules may apply to the automatic stay in their current bankruptcy case.
According to 11 U.S.C. § 362(c)(3) of the Bankruptcy Code, if a prior bankruptcy was dismissed in the year before the present bankruptcy filing, the automatic stay terminates 30 days after filing for bankruptcy, unless it has been extended by the court after a showing by the debtor that the case was filed in good faith.
Section 362(c)(3)(C) of the Bankruptcy Code states that the following elements will constitute a presumption that the bankruptcy case was not filed in good faith, and that the automatic stay should not go into effect:
Although these are the presumptions that a case was not filed in good faith, these presumptions may be rebutted if the debtor can show clear and convincing evidence to the contrary.
Pursuant to § 362(c)(4) of the Bankruptcy Code, if two or more bankruptcy cases have been dismissed within the previous year, the automatic stay does not go into effect. However, the debtor has 30 days from the filing of the petition to may seek an order to impose the stay, by demonstrating that the bankruptcy case was filed in good faith.
Under section 362(b) of the Bankruptcy Code, there are 28 exceptions to the automatic stay, or reasons that the stay will not go into effect in certain circumstances. The exceptions that primarily affect most consumers are:
The Bankruptcy Court for the Eastern District of New York - This court serves the Eastern District of New York, including the counties of Nassau, Suffolk, Brooklyn and Queens, and is a unit of the U.S District Court. All bankruptcy proceedings in the Eastern District of New York are filed in this court.
USBC-EDNY Local Rules – This link is to the local rules for the United States Bankruptcy Court for the Eastern District of New York. These rules vary from the federal rules, and are applicable only to the USBC-EDNY.
Chapter 3 of the United States Bankruptcy Code – Title 11 of the United States Code, which is also known as the Bankruptcy Code defines the federal rules and laws regarding bankruptcy. This link is directly to section 326 of Chapter 3, which applies to the automatic stay in bankruptcy.
Contact the law firm of Andrew M. Doktofsky, P.C. today at (631) 673-9600 for a free consultation about the bankruptcy automatic stay throughout Suffolk County and Nassau County, New York. Andrew Doktofsky is an experienced Long Island bankruptcy lawyer who will explain how the automatic stay can protect you from creditor harassment in New York.