After the filing of a bankruptcy petition, the debtor needs protection from the collection efforts of its creditors. Therefore, the bankruptcy law provides that the filing of either a voluntary or involuntary petition operates as an automatic stay which prevents creditors from taking action against the debtor. This is similar to an injunction against the creditors of the debtor. The automatic stay ends when the bankruptcy case is closed or dismissed or when the debtor is granted a discharge. Anyone who willfully violates the stay in the case of an individual debtor can be liable for actual damages caused by the violation and sometimes liable for punitive damages.
San Diego California Motion to Extend Automatic Stay and Notice of Motion
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How to fill out Motion To Extend Automatic Stay And Notice Of Motion?
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FAQ
Failure to terminate debt collection activity already in motion when a bankruptcy is filed can lead to both automatic stay and discharge injunction violations. A penalized a judgment creditor that failed to terminate wage garnishment proceedings set in motion pre-bankruptcy.
An automatic stay stops creditors from trying to collect debts from a debtor who has filed for bankruptcy until court proceedings are completed. Creditors, collection agencies, and others who violate the automatic stay can be sued by the debtor.
A motion for relief from the automatic stay is a creditor's way of asking the court for permission to eg. foreclose on a house or repossess a car. As soon as any type of bankruptcy is filed, an injunction called the automatic stay comes into place.
Automatic Stay -- Immediately after a bankruptcy case is filed, an injunction (called the "Automatic Stay") is generally imposed against certain creditors who want to start or continue taking action against a debtor or the debtor's property.
The automatic stay is an injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.
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.
How Long Does an Automatic Stay Last? The automatic stay remains in effect until your case is closed. But, of course, it isn't always that simple. For Chapter 7, it's often the case that a stay will last the 3-5 months the court case is open.
To obtain relief, the creditor must file a motion to request relief, which is usually done soon after the debtor files for bankruptcy. If grounds are shown for why the creditor should be granted a relief from stay, then notice must be sent to the relevant parties.
Usually, a creditor can get around the automatic stay by asking the bankruptcy court to remove ("lift") the stay. To avoid fines and penalties, the creditor must file a motion asking for permission to continue with collection efforts.