My name is Danielle Diaz. One of the things I've learned in life, both inside and outside the courtroom, is that it is important to not see others as your enemy. Even though you may see the prosecutor as your enemy, he or she is just trying to do a job. It may be possible that you can get a prosecutor or the judge to be sympathetic and get him or her on your side. In order to accomplish this, you need to understand the law. I feel that most individuals do not understand the law, which is why I was motivated to create this blog.
When a bankruptcy lawyer submits a petition for relief and the court accepts, the judge automatically enters a stay. This is a legal order that tells creditors that there is a bankruptcy happening and prevents them from taking certain actions. You might wonder what this accomplishes so let's take a look.
For the vast majority of petitioners, this is the biggest argument for getting a stay. The stay includes instructions to all of the petitioner's creditors telling them to cease all harassing communications. In other words, your creditors have to stop sending you mail, making phone calls, and trying to contact you in connection with the debt. The judge will also instruct your creditors to direct all communications through the court, and the court will then relay any relevant information or requests to you by way of your bankruptcy attorney.
Be aware, though, that only named creditors from the petition will have to observe the stay. If you forget to name a creditor or plan to address them through a later filing, that creditor is not subject to the order. Consequently, they can continue collection actions.
As with any legal action, you owe the other parties to the matter formal notification. If there was any doubt about whether a formal bankruptcy proceeding was underway, it's over once the court enters the stay. Once a creditor has a formal notification, they can begin preparing any complaints they might have about the proposed bankruptcy.
Especially if you're in a situation where you need some breathing room, the time offered by a stay can make a big difference. For example, someone who wants to renegotiate their mortgage through the Chapter 13 bankruptcy process will have some time to get their finances in order while they prepare a repayment proposal for the court.
Bear in mind the stay doesn't necessarily mean endless protection from creditors foreclosing. If you're pursuing a Chapter 7 case, the stay will only buy you enough time to figure out what comes next. Someone who has a mortgage, for example, will eventually have to vacate the premises once the court grants a Chapter 7 petition.
Rental and utility payments are also stayed for a certain period. Depending on the jurisdiction, though, a utility company may be able to demand a deposit as a surety against future payments. Eviction actions are also sometimes temporarily stayed pending a debtor's bankruptcy.
If you have additional questions, reach out to a local bankruptcy attorney.