The phrase “automatic stay” is synonymous with what occurs after filing a bankruptcy. So if you think that you might want to start the process, it’s good to learn what this phrase means in greater depth, and what your rights are in association with this phrase.
What is Automatic Stay?
An automatic stay is a court order that occurs after filing a bankruptcy. It disallows any creditors that have been summed up in the process to try to collect their debts from you. In other words, after they’ve received the notice, they will be going against court orders if they contact you directly in any way (written or verbally). Most importantly, they are not able to sue you because at that point you are no longer responsible for paying the debt to them.
What are the Immediate Effects of Automatic Stay?
Some direct results of filing a bankruptcy and the automatic stay are the following:
- No more repossessions. If part of your debt includes items that can be repossessed, once you have completed the process of filing a bankruptcy, your items can no longer be repossessed.
- Taxes on hold. After you have filed, the IRS is prohibited from conducting any collection activities.
- You cannot be evicted. If you are behind in your rent, your landlord cannot evict you under any circumstances.
- Your home cannot be foreclosed. If you owe money to your mortgage company and/or it is in the process of foreclosure, it cannot continue. And if it has not begun the process but was about to, it must stop.
- No litigations. No wage garnishments or lawsuits can be filed. If the processes have already started, they must be suspended.
What is Not Affected by Automatic Stay?
One action that is not affected by automatic stay includes criminal proceedings. Also, it’s important to note that if someone has co-signed with you on a debt that you owe and have included in the bankruptcy proceedings, the creditor can still go after your co-signer if they weren’t included in your filing.
Filing a bankruptcy brings with it a lot of considerations, and the automatic stay is one of them. So before you start the process, it’s good to make sure you understand just what this part of the process means for your life.
An IRS lien might have an upsetting outcome on your credit scores. It may furthermore echo in a bad manner on your credit transaction record. Furthermore, the IRS has become known to come up with queries at the credit ratings reporting organizations which could additionally have an effect on your capacity to acquire credit loan over a ideal groundwork. The economy over the last few years has no doubt led to greater than a number of consumers getting an IRS lien in their credit profile that they were ignorant of. 26 U.S.C. § 6320 requires the Secretary (IRS) to alert in writing the person defined in section 6321 of the declaring of a notice of lien by Section 6323. Section 6321 says that whenever any man or women compelled to be charged any tax ignores or refuses to pay after demand is attained, the amount will be a lien in favor of the United States with just about all property as well as rights to property, no matter if real or personal, that belong to such person. Section 6323 goes into the facts precisely which involving your property the lien affixes too.