There’s a great level of comfort and relief experienced by people who file for bankruptcy protection and are granted automatic stays, keeping creditors off of their backs. However, a stay doesn’t muzzle all of your creditors, and there are instances in which a creditor can request that the court lift the automatic stay.
During an automatic stay, creditors are not allowed to take any action against you in collecting a debt during the process of filing for bankruptcy. However, as all creditors want their money back one way or the other, some will try and find a way around it.
In general, only creditors with a lien on your property request lifts in the automatic stay, but any creditor can make the request. There are certain criteria which need to be met, before a judge may be more likely to lift the stay.
Here are some examples:
– You fail to maintain insurance on your car or home.
– You are behind on home or automobile payments.
– You are about to be evicted for failure to pay rent.
– You are in a bankruptcy repayment plan and have fallen behind on your installments.
– You have a debt which would not be wiped out by a bankruptcy, like child support, alimony or criminal fines, and the creditor requests permission to collect.
If one of your creditors tries to have the stay lifted, they would first have to file a written motion in court, detailing why they are making the request. You will be notified of the motion and there will be a hearing. However, you should know that the burden of proof rests with the creditor making the request – not with you.
To help in defending yourself from this type of action, it’s important to arm yourself with a highly qualified bankruptcy attorney.
Joel R. Spivack, Esq. has been fighting for the rights of New Jersey residents in bankruptcy protection filings for more than 20 years. Contact the Law Office of Joel R. Spivack today for a free consultation. Call 856-488-1200.