What is the “automatic stay” and why should I be concerned about it? What can a person do if there is a violation of the automatic stay?
The basic purpose of the stay is to protect the debtor and his or property. The automatic stay is one of the fundamental debtor protections provided by the bankruptcy laws. It gives the debtor a breathing spell from his creditors. It stops all collection efforts, all harassment, and all foreclosure actions. It permits the debtor to attempt a repayment or reorganization, or simply to be relieved of the financial pressures that drove him into bankruptcy. If there is a violation of the automatic stay, then the debtors lawyer can seek sanctions against the creditor. Basically, the creditor must automatically stop all efforts to collect any debts. The bankruptcy lawyer can file a motion to obtain damages for the debtor is the automatic stay is violated. In most case, the bankruptcy court will only grant the debtor damages if the violation of the automatic stay is egregious, and the creditor was warned at least once.
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