One of the things that individuals most look forward to in a bankruptcy is the concept of the automatic stay. The automatic stay requires that all collection methods stop as soon as an individual who is in debt files for bankruptcy. When the automatic stay goes into effect, the creditors are no longer permitted to call the debtor, repossess any of their property, or continue with foreclosure actions on one’s home. The automatic stay comes as a great relief to many debtors, as they are afforded some much needed room to breathe.
In the event that a creditor continues to try and collect debts when the automatic stay is in effect, the bankruptcy court may impose certain penalties for such violations. In the event that a creditor repossesses the debtor’s property when the automatic stay goes into effect, the bankruptcy court will require that the property is returned to the owner. The court may hold the creditor liable for violating the rules of the automatic stay and may have to compensate the debtor in some way.
If a creditor is still attempting to collect debts when they are not permitted to, it is important for the debtor to notify their attorney, the bankruptcy court trustee, and request protection from the court.
If you have questions about bankruptcy in Rockland County, contact us today.
If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq.today to schedule a consultation and discuss your options.