An automatic stay in Arizona is your first line of defense against your creditors when filing for bankruptcy and our seasoned Phoenix bankruptcy lawyers can help you stop creditor harassment by filing a petition. As soon as the initial petition is in place, the automatic stay is enacted and prevents collectors from contacting you, pursuing legal action against you, and from garnishing your wages for the purposes of amending the debt.
Benefits of an Automatic Stay
Once the automatic stay has come into place, you will no longer have to worry about your home or property being foreclosed. An automatic stay stops foreclosure proceedings for the duration of the bankruptcy process. Generally, by the end of the process, issues with property and mortgage payments have been resolved, so an automatic stay may be instrumental in preserving your owned home and land.
Collectors are also rendered incapable of contacting you while an automatic stay is in place. Your debts are in the process of being settled through bankruptcy, so any attempt on the side of a collections agency to contact you would be futile. Moreover, the stay protects you from punitive action from your creditors, providing a shield while you get your finances in order.
Another benefit of automatic stays is their ability to keep you living comfortably. If, for instance, you have fallen behind on your utility payments, the stay will prevent your provider from disconnecting your services. Payment will still be due (unless it is covered in your bankruptcy), but you will be granted more time without loss of services. A dedicated Phoenix bankruptcy lawyer will be able to help you further understand how the aforementioned benefits affect your particular situation.
Automatic Stay Exceptions
- Child support and alimony. Nearly all proceedings involving divorce or parental matters in Arizona remain untouched by an automatic stay. While the stay is in place, you will still be responsible for or entitled to child support, any litigation regarding custody will continue, and wages withheld for purposes of child welfare will still stand.
- Taxes. Any tax proceedings will also continue unaffected by the stay’s presence. Audits, deficiency notices, and dealings with tax assessments will still occur at their normal rate.
- Pension related loans. If a portion of your income is generally withheld to repay a loan from a pension program, that portion of income will still be allocated to that creditor. Pension loans that stand immune to automatic stays are mostly individual retirement funds and other job-related entities.
- Impact on evictions. Though an automatic stay will protect you from foreclosure, your tenancy may still be affected. If you are a renter whose payments are delinquent and are facing removal, the stay will not preclude your landlord from proceeding with the eviction if they have a judgement for possession; however, if you file before a judgement for possession is obtained by your landlord, the automatic stay may protect you from being displaced.
Loss of Automatic Stay
Repeat bankruptcy filings could mean your automatic stay right is waived. If within the past year you have filed for bankruptcy and been refused, the court could preclude you from benefiting from another automatic stay.
Missing deadlines is another way automatic stays could be compromised. You must meet the deadlines set by the bankruptcy code regarding the property, which acts as collateral. Failure to do so may leave you unprotected by the stay.
Creditors can petition for the stay to be lifted, but this is only if it is not serving the intended purpose. Working with a skilled bankruptcy attorney in Phoenix, AZ will ensure your bankruptcy proceedings continue without incident, and that you can realize the full benefits of the process. Automatic stays can shield you from much during your bankruptcy process, but the best way to keep them working in your favor is by having a knowledgeable advocate serving as your guide. Contact us at (602) GOT-DEBT for any questions regarding automatic stays.