The Automatic Stay May Not Be So Automatic

If you’re thinking about filing for bankruptcy, and you’ve filed a previous bankruptcy case that was dismissed, the timing of your new bankruptcy filing can have a big impact on the automatic stay in your new bankruptcy case. One of the great benefits of filing for bankruptcy is the automatic stay, which will prevent the commencement and/or continuation of most collection actions such as repossession, garnishments, attachments, foreclosures, and debt collection harassment. The automatic stay can provide you with the breathing room you need to strategize about your financial future. But, if you’ve had prior bankruptcy filings, the automatic stay may terminate or may not go into effect at all. For example, if you have filed a prior bankruptcy case that was dismissed within the previous year, the automatic stay may only last for the first 30 days of your new bankruptcy case. If you had two prior cases dismissed within the year, the stay may not go into effect at all.

If you’ve filed for bankruptcy previously, be mindful that the automatic stay may limited in your new filing. You may consider delaying the filing of your new case so that the filing date is beyond a year from the dismissal of your last case. If you can’t delay the filing of your new bankruptcy case, make sure to file a motion to extend or impose the automatic stay in your new case as soon as possible, preferably, at the same time you file your new case. You will have to show that the filing of your new case was in good faith. You must file the motion and have a hearing on motion within 30 days from the date of the filing of your new case.

If you’ve filed already or if you are thinking about filing, a consultation with a lawyer is a good place to start to consider your options. Ask us for a free docket review. Let us help you plan for a successful bankruptcy case.

The purpose of this communication is to better inform potential bankruptcy filers of procedural matters involved in filing for bankruptcy. Nothing contained herein is intended to advise anyone as to the legal remedies for a particular circumstance. It is hopeful that this message will be useful to you in answering general questions on how to proceed with a bankruptcy filing.

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