Stop All Creditor Harassment Now!

Olympia, WA Bankruptcy Lawyers

A Washington State bankruptcy petition stop all creditor harassment immediately when an "automatic stay" is put in place.

The second a bankruptcy is filed, an “automatic stay” is put into effect. The automatic stay stops any attempt to collect a debt automatically. If a creditor continues to try to collect the debt after they know about the bankruptcy filing, they can be sanctioned for violating the automatic stay. Sanctions could include actual damages, attorneys fees and punitive damages.

Even if a creditor does not know about the bankruptcy filing, the automatic stay is in effect. They can’t be sanctioned if they didn’t know about it but actions they take, such as garnishments, the filing of a law suit or other collection actions have to be undone once they find out about the law suit. A payroll department might be holding up to 60 days of garnishments that have to be returned to the employee, for instance.

The automatic stay does not apply to garnishments for child support. It does not prevent continuing a divorce for most purposes but will hold up a final division of debts and property. It also does not apply to fines, such as parking tickets or speeding tickets. However, in a Chapter 13, you can have a license reinstated if it was suspended for failure to pay a ticket anyway.

The automatic stay is different from the discharge. There are several important exceptions to the discharge including some back taxes and student loans. Though some taxes and student loans are not discharged, they automatic stay will stop them from being collected while in a bankruptcy. You can file a Chapter 13 and have the benefit of the automatic stay even if you are not eligible for a discharge because you filed a Chapter 7 in the past four years.

If you filed another bankruptcy in the last year, the automatic stay expires in 30 days unless you can show that the second case was filed in good faith.

The automatic stay is a powerful weapon against creditors that allows you some breathing space to restructure your life. Of course, it only applies to debts incurred before you filed your case. Though the stay takes place immediately if you need it in an emergency, it is best to plan for filing bankruptcy well in advance by talking to an experienced bankruptcy lawyer.