Portland Bankruptcy Automatic Stay

Going through a financial crisis can be stressful and overwhelming, and sometimes filing bankruptcy is the only way to deal with your debts and get a fresh start. There are different types of bankruptcy in Oregon. No matter your financial situation, every kind of bankruptcy will offer you protection against creditors and debt collectors through the Automatic Stay.

Dealing with debt can be overwhelming. If you need to protect yourself from relentless debt collectors and agencies, filing bankruptcy may be the best solution. Immediately after a bankruptcy is filed, the automatic stay will be imposed upon certain creditors who want to take action against you or your property. Our Portland bankruptcy attorneys can help you understand how bankruptcy works and how its automatic stay function can help you regain financial control. Call us at 503-694-4445 to schedule a case evaluation with an experienced Portland bankruptcy attorney.

What is an Automatic Stay?

Once you file bankruptcy, you will get the privilege of using the automatic stay to prevent your creditors from harassing you or giving you excessive calls. Once the bankruptcy court issues it, it will immediately stop most cases against you and most debt collection initiatives being taken against you or your properties by a debt collector, collection agency, or government agency. This can sometimes compel debtors to file for bankruptcy because an automatic stay can temporarily, or sometimes even permanently, help with foreclosure, repossession, or wage garnishment. 

An automatic stay is triggered when a debtor files for bankruptcy under Section 362 of the United States Bankruptcy Code. The automatic stay applies to persons, businesses, and all Bankruptcy Code chapters.

Non-debtor entities such as corporate affiliates, corporate officers, co-defendants, or guarantors are not subject to the automatic stay.

What the Automatic Stay Can Prevent

Utility Disconnections

If you’re struggling financially and have utility bills to pay, the utility company can threaten you to cut your gas, water, and electricity. If you file for bankruptcy, the automatic stay can prevent your utilities from being disconnected for at least three weeks. 

Of course, being unable to pay your bills is not reason enough for you to file a bankruptcy petition. But without the looming threat of your utilities being cut off, then you may focus on other concerns such as managing your other debts that you can either pay or discharge.

Tenant Eviction

If you’re at risk of being evicted from your place of residence, the automatic stay can provide some temporary relief. For instance, your landlord already has a court-issued judgment of possession against you; then the automatic stay can no longer prevent the eviction proceeding. If your landlord accuses you of endangering their property or that you’re using illegal substances, then the automatic stay cannot protect you from the eviction process as well. In other cases, the automatic stay can afford you a few weeks, but your landlord can ask the court to lift the automatic stay and allow the eviction process to proceed. Usually, the court approves this kind of request. You must note that your service provider might require you to make advance payments once the automatic stay is lifted to ensure that you can make future payments.

Property Foreclosure

If your home is at risk of being foreclosed, an automatic stay can help stop the proceedings. However, what happens next will depend on what type of bankruptcy you will file. For instance, keeping your home is possible through a Chapter 13 bankruptcy. This is because you’ll be allowed to catch up on your late payments through a three-to-five-year debt repayment plan.

On the other hand, a Chapter 7 bankruptcy is a type of liquidation bankruptcy, so you won’t be able to keep your home if you’re behind your payments, so the relief will only be temporary.

Car Repossession

Similar to eviction, an automatic stay can help prevent your car from being repossessed temporarily, and whether you get to keep it or not after the automatic stay is lifted will depend on the type of bankruptcy chapter filed. If you filed a Chapter 13, you need to have a repayment plan that you have to settle in 3-5 years to keep your car. On the other hand, if you file for Chapter 7, your car lender won’t be able to repossess your vehicle while the automatic stay is in place. However, they can ask the court to lift the automatic stay by filing a “motion for relief from the automatic stay.” The court will most likely approve the motion if the lender can prove that their interests are not protected due to your failure to pay your loan on time.

Wage Garnishment

Once you file for bankruptcy, the automatic stay will stop all wage garnishments until the Oregon bankruptcy court lifts it. Wage garnishment is a court-issued order that requires your employer to withhold a certain amount of your salary to pay your creditors or a government agency. The amount of wage garnishment will depend on the type of debt you have and the garnishment limits based on federal and state laws.

It is also important to note that an automatic stay cannot prevent all types of wage garnishment. Student loans, child support, and alimony or spousal support won’t be discharged. 

If you’re experiencing utility disconnections, multiple wage garnishments, eviction, auto repossession, or house foreclosure, then you might want to consider filing for bankruptcy as a form of debt relief. Our competent and experienced bankruptcy lawyers in Portland, Oregon, can help you decide what type of bankruptcy is best for your situation. Don’t hesitate to call our Portland bankruptcy law office to schedule an initial case evaluation today.

Struggling with Debt?

Financial distress can be extremely overwhelming; that is why you must choose a bankruptcy attorney who can understand your financial situation and help you choose the right bankruptcy or debt alternative for your case. At Michael D. O’Brien & Associates PC, our Portland bankruptcy attorneys have more than two decades of experience helping Oregon families get a fresh start in Portland, Tigard, Bend, Clackamas, and nearby communities in the Oregon area.

Don’t wait until it is too late! Our Oregon bankruptcy attorneys can help you get out of debt. Contact us today at (503) 694-4445 to get the help you need.