Bankruptcy allows a consumer in Fort Lauderdale, Florida, to remove some unsecured debts legally. The most common bankruptcy types are liquidation under Chapter 7 and repayment under Chapter 13. While they differ, all bankruptcy types have the automatics stay in common.
Automatic stay overview
The automatic stay is part of the bankruptcy code that offers consumers temporary protection from creditors. Once the consumer files, the creditors cannot garnish wages or carry out legal action against the filer.
The automatic stay also prevents utility shutoff for 20 days, repossession, foreclosure and collection for the overpayment of government benefits. It will halt eviction if the consumer has already filed bankruptcy, but not if the landlord has filed a judgment against him or her.
The filer only gets 30 days of protection if he or she had a case dismissal and files another case within one year. An individual doesn’t get any protection if he or she had two or more cases dismissed within one year. The automatic stay also doesn’t prevent the collection of domestic obligations, criminal proceedings and some tax debt.
Motion to revoke the automatic stay
If a creditor disagrees with the automatic stay, it may object by filing a motion to lift it. These motions are commonly filed by secured creditors or the loan companies that required the debtor to put up collateral.
A creditor may ask for the stay to be lifted if:
• It feels that the value of the property will decline during the proceedings.
• The property has enough equity to pay the debt.
• The consumer doesn’t own the property.
• It needs to continue an eviction or foreclosure.
• There is a landlord/tenant dispute.
The creditor must notify the consumer of the motion and hearing, and the consumer has 14 days to answer it.
While the automatic stay is temporary, it allows a consumer to make plans to pay his or her debt. If a creditor ignores the automatic stay, the consumer can file charges against it.