Can Creditors Lift the Automatic Stay?

Whether it’s to stop foreclosure or put an end to wage garnishment, many individuals file for bankruptcy to take advantage of automatic stay. The benefits of automatic stay are incredible, as creditors are unable to collect anything from you as the bankruptcy is proceeding. Just like anything else, however, automatic stay is not permanent – and creditors can even request the court to lift the protection, thereby resuming collections against you! By understanding the automatic stay process and how a Tampa bankruptcy attorney can help you, you’ll be better equipped to handle any unexpected events.

When the Automatic Stay Might Be Lifted

The good news is that it’s rare for creditors to approach the courts and request for automatic stay to be lifted. Even if this does happen, you will have a bankruptcy attorney on your side that will fight to ensure that your rights are protected throughout the entire process. However, automatic stay is not set in stone, and if your creditors decide to continue pursuing repayment of your debts, they could challenge the protection in court. In determining whether or not to lift automatic stay, the court will consider:

  • Whether this creates unjust prejudice against the debtor
  • If a hardship is placed on the creditor if the protection isn’t lifted
  • The merits and probability of the creditor’s request to lift automatic stay

All of these considerations are compelling reasons to always work with a bankruptcy attorney if you file for bankruptcy. Many individuals try to circumvent the system and save money by completing the process alone, but complications including automatic stay are best handled by the expertise of a bankruptcy attorney.

So when might the court lift automatic stay?

If you’re not making payments on any debt that is considered secure, then the court may opt to lift this protection. Remember, physical property is considered collateral, so it’s vital to remain as current on your payments as you can. This is why it’s important to plan a strategy accordingly with your bankruptcy attorney. The court may also lift automatic stay if your creditors can successfully make the case that they aren’t adequately protected.

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