Losing Automatic Stay for Bankruptcy Filing | Paducah, KY

Losing the Automatic Stay for Repeat Bankruptcy Filings in Paducah KY

Know Your Legal Options on Automatic Stay and Bankruptcy Filings in Paducah, KY

While the idea of losing the automatic stay for repeat bankruptcy files might be frightening, it also gives an opportunity to consult with knowledgeable Kentucky bankruptcy lawyers who can assist you in navigating the process and getting your finances back on track.

A bankruptcy filing can save the lives of people and companies who are drowning in debt. It provides a fresh start and the potential to regain financial stability by giving the option to restructure or cancel debts. Repeated bankruptcy filings, however, can come with their own set of difficulties, such as the loss of the automatic stay, which can make filers more susceptible to collection efforts by creditors. 

Here, we will cover all the basics about Losing the Automatic Stay for Repeat Bankruptcy Filings, including:

  • What is the function of the Automatic Stay in bankruptcy filings?
  • What to Prepare for Your Automatic Stay Request?
  • What Would Be Considered Bad Faith?

It’s crucial to understand that failing to obtain the automatic stay is not the end of the road. You can navigate the legal system, safeguard your rights, and come out of bankruptcy stronger and more financially secure than ever with the assistance of skilled and trusted Kentucky bankruptcy lawyers.

What is the function of the Automatic Stay in bankruptcy filings?

After the debtor files the formal bankruptcy paperwork, the automatic stay typically takes effect. It lasts until the court or debtor dismisses the case or the debtor receives a discharge and prevents creditors from engaging in the majority of collection actions. Creditors still receive protection if the automatic stay is in effect. The debtor’s property remains in a bankruptcy estate controlled by the bankruptcy trustee overseeing the case, so it’s protected from the reach of other creditors.

There are different scenarios for Chapters 7 and 13

  • Chapter 7 – Following a property sale, the proceeds will be distributed in accordance with bankruptcy laws.
  • Chapter 13 – Via the debtor’s regular payments under the repayment plan.

But, the debtor’s future earnings and assets they may have purchased with those earnings would be in danger. For instance, a creditor may garnish earnings (deduct money from a paycheck) earned after the filing of a Chapter 7 case even though they wouldn’t have the right to seize funds in a bank account on the filing date because those funds would be in the bankruptcy estate. The automatic stay does not prevent a Chapter 13 creditor from taking these actions; rather, the creditor is bound by the terms of the Chapter 13 repayment plan.

How long will the Automatic Stay last?

The number of times the debtor filed during the previous year will determine how effective the Automatic Stay is.

  • Thirty Days – The stay will last 30 days if the debtor filed another bankruptcy petition within the last year.
  • No Stay – The court will not automatically impose a stay if the debtor filed 2 or more lawsuits in the previous year.

Is it Possible to Extend the Automatic Stay for Filing Bankruptcy?

The debtor has the option to ask the court to request the stay or extend it for an additional 30 days. A motion that is granted will show that the debtor is not abusing the bankruptcy system.

What to prepare for your Automatic Stay request?

The legal courts usually presume that you are filing the motion in bad faith while deciding whether to grant or extend the stay. To succeed, you must persuade the court that the case’s dismissal was caused by something other than your own fault.

Here are the most common things to remember when preparing for an Automatic Stay request:

  • Gather all relevant documentation, including your bankruptcy petition and schedules, any court decisions or judgments pertaining to your debts, and any other relevant documents.
  • Make a list of all your debtors, their addresses, and any legal actions or other collection efforts that are currently pending.
  • With the help of a Kentucky Bankruptcy attorney, draft a motion for an automatic stay 

It’s necessary to deal with a skilled bankruptcy lawyer who can guide you through the particular needs of your case because automatic stays might differ based on the type of bankruptcy filing. Farmer & Wright PLLC has reliable Bankruptcy Lawyers to help you with requests for automatic stay when filing bankruptcy. Your motion can be properly filed with the court, and any required hearings or appearances can be planned and attended with the help of an attorney. 

What would be considered Bad-Faith When Filing Bankruptcy?

In general, filing for bankruptcy in bad faith entails making an effort to take advantage of the system or fool the judge. Bad faith might take the form of concealing assets, giving incorrect information, or declaring bankruptcy only to put off or avoid paying bills.

The judge won’t allow your request if it appears that you are filing in an effort to game the bankruptcy system. The court disapproves of debtors who utilize frequent filings to obstruct legal actions taken by creditors.

A knowledgeable bankruptcy attorney can assist you in navigating the system and ensuring that your rights and interests are protected. It is crucial to approach the bankruptcy procedure honestly and transparently. Farmer & Wright PLLC has reliable and trusted bankruptcy attorneys that help you navigate through the legal system and give you answers to your questions. 

Call Our Kentucky Bankruptcy Attorney Now!

A bankruptcy filing can be a complex and overwhelming procedure with lasting effects on your financial future. Because of this, it’s crucial to consult with a competent bankruptcy lawyer while declaring bankruptcy.

An automatic stay petition must be filed in order for creditors to be immediately protected from collection efforts, making it a crucial step in the bankruptcy process. But, because the procedure can be challenging, it’s crucial to engage with a skilled bankruptcy lawyer who can make sure that your rights and interests are safeguarded all the way through.

At Farmer & Wright PLLC,  we can discuss about losing the automatic stay for repeat bankruptcy filings and other bankruptcy issues that you might be facing. Our trusted Paducah KY attorneys can help you develop a comprehensive debt relief strategy. Schedule a free consultation with us today!

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