Bankruptcy – Chapter 13 – Stopping Foreclosure, Repossession & Garnishment
BANKRUPTCY: Stopping Foreclosure, Repossessions & Garnishments: Will it stop them?
Q: What is a “stay” or “stay order” in Bankruptcy?
A. A “stay” is an order issued by the Bankruptcy Court basically requiring that all efforts to collect a debt or to enforce payment of debt be stopped pending the while the bankruptcy case is proceeding, or until the Bankruptcy Judge allows the collection effort to continue. On the filing of the Bankruptcy Petition, the Court will automatically issue a stay order unless the case was previously dismissed for certain causes or under certain circumstances. The stay order requires that creditors stop calling, harassing or writing you, and that most civil judicial proceedings cease.
Q: Will filing a Chapter 13 stop a foreclosure of my house?
A. Yes. If a stay order has been issued and is in effect in your case (see above). In Georgia, almost all foreclosures of residential real property are done by a non-judicial sale of the house under a power of attorney contained in the Deed to Secure Debt. The mortgage company and its attorney must stop any efforts to collect the debt, and this includes foreclosure by sale of the house under a non-judicial power of attorney contained in a Deed to Secure Debt. Georgia foreclosure sales are held on the first Tuesday of each month at the county courthouse.
Q. Will filing a Chapter 13 stop a repossession of my car?
A. Yes. If a stay order has been issued and is in effect in your case, the lender must stop any efforts to collect the debt, and this includes repossession of a motor vehicle. If you believe your vehicle is about to be repossessed, if at all possible you should file the bankruptcy case before it is towed off by the lender. If the vehicle has been picked up, you can get it back if you act quickly and file the bankruptcy case before the lender sells the vehicle at auction to a third party.
Q. Will filing a Chapter 13 stop a garnishment of my wages or of my bank account?
A. Yes. Once the automatic stay order is issued, the judgement creditor must stop all efforts to collect the debt. This includes garnishment of wages or bank accounts. Your employer or your bank will be notified by the Court of the filing of your bankruptcy case by mail. Most employers or banks will release your attached funds within a few days of receiving the court’s notice.
Q: Will filing a Chapter 13 Bankruptcy stop judicial proceeding to collect a debt?
A. YES. If a stay order has been issued and is in effect in your case (see above). The lender must stop any efforts to collect the debt, and this includes the continuation of a lawsuit to obtain a judgment against you.
Q: Will filing a Chapter 13 Bankruptcy stop the creditor and debt collector calls and harassment?
A. YES. Once the case is filed and a stay order has been issued and is in effect in your case (see above). The creditor, collection companies, attorneys must stop any efforts to collect the debt, and this includes the constant and harassing phone calls and letters that they send you.
Q: Will filing a Chapter 13 Bankruptcy stop a divorce case or domestic relations proceedings?
A. NO. In general, the divorce and domestic relations cases are not stopped by the filing of a bankruptcy. However, collection of arrearages on child support or alimony may be. The relationship between bankruptcy law and divorce/domestic relations law can be very complicated, and is beyond the scope of these responses to Frequently Asked Questions. You need to consult with your attorney on a case-by-case basis in these situations.
Q. Is a “stay order” always automatically issued?
A. NO. If you have previously filed and dismissed (or had dismissed) a bankruptcy case within one year of the current filing, then the automatic stay order is issued for only 30 days. If you have filed and dismissed (or had dismissed) 2 or more bankruptcy cases within one year of the current filing, then no stay order is issued. You can file a motion with the court to extend or grant a stay order if either of these prior bankruptcy cases exist. Your motion should be filed within 30 days of the date of filing the current case.
Contacting the Right Attorney: Bankruptcy can be a complicated matter. The responses to these Frequently Asked Questions are general in nature, and are not intended to provide legal advice for specific cases. A consultation with a Georgia bankruptcy attorney can provide you with the information you need to determine which option best addresses your circumstances. As a solo practitioner, I am able to give more time and personalized attention to my clients. I will personally communicate with creditors or banks to resolve your issues. Your case will never be handed down to a legal assistant or other staff member.
NOTICE: The services or benefits offered are bankruptcy relief under the provisions of the U.S. Bankruptcy Code. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.