Pennsylvania Bankruptcy Help
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What is the automatic stay?
The automatic stay is one
of the most valuable functions of a bankruptcy proceeding for the debtor
seeking relief from creditors. The automatic stay immediately stops
any lawsuit filed against you and virtually all actions against your property
by a creditor, collection agency or government entity and provides an injunction
against the continuance of any action by any creditor against the debtor
or the debtor's property. The automatic stay prohibits:
- Beginning or continuing law suits
- Collection calls
- Repossessions
- Foreclosure sales
- Garnishment or levies
The automatic stay remains in effect until:
- A judge lifts the stay at the request of a creditor;
- The debtor gets a discharge; or
- The item of property is no longer property of the estate.
Essentially, an automatic stay means
that upon filing the petition for bankruptcy, all creditors, including
the IRS, collection agents and attorneys, etc, are restrained from trying
to collect their debts, repossess property, or foreclose. Simply
put, they cannot send you insulting or threatening collection letters,
call you on the phone, sue, garnish your wages, repossess a car, foreclose
on your home, or do any other act to collect on the debt. Anyone
who willfully violates the stay in the case of an individual is liable
for actual damages caused by the violation and sometimes for punitive damages.
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