Thursday, July 30, 2020

Bankruptcy Automatic Stay: Stopping Eviction, Foreclosure and Collection Efforts

As we near the end of the month of July, in the middle of this pandemic year of 2020, with Florida dividing their attention between the weather that comes with hurricane season and the spread in Covid 19, Florida is also looking at the possible end of the moratorium on foreclosures and evictions while waiting to see if congress passes another stimulus package. While people have been out of work, with mounting debt from credit cards, doctor's bills, utility bills, mortgage payments or rent, and vehicle payments, things are starting to come to a head.

While bankruptcy is something that should be turned to after exhausting other options, bankruptcy should be kept on your radar screen when considering alternatives. You can try to negotiate with creditors, in that many would prefer to limit the expenses of having to file a law suit to get their money or goods. If negotiation fails, the creditor may be open to allowing a third party to negotiate, such as a mediator. Of course, you have the trump card (no pun intended in this election year), the card of bankruptcy.

What can bankruptcy do? When one files a petition for bankruptcy, it causes certain provisions of the bankruptcy code to automatically kick in by operation of law. One very important provision is something called the “automatic stay” under 11 USC § 362 that provides for a “stay” regarding many things pertaining to the commencement or continuation of an action or proceeding against the debtor if it was for something that happened prior to filing bankruptcy.
If you have a question about whether or not this provision of the bankruptcy code will stop a proceeding in your particular case, you should seek the advise of a competent local bankruptcy attorney. Because of the pandemic, some attorneys, such as myself, are offering virtual consultations, either by phone or by internet video conferencing through platforms such as Google Team or Zoom.

If you think you may need the help of something like bankruptcy, you should seek the advise of a local bankruptcy attorney sooner rather than later. I am located in Middleburg, Florida, which is located in the Middle District of Florida; as such I am familiar with the local rules and traditions of the courts in my area.  Rules and traditions change from jurisdiction to jurisdiction, so you should seek the advise of a local bankruptcy attorney.  I highly recommend you DO NOT try to plan for filing bankruptcy based on intuition, that is, without speaking with a bankruptcy attorney. Bankruptcy is complicated and does not necessarily operate the way many people think it does. In preparing for bankruptcy, going at it alone could cause you to unintentionally put yourself into a position of either not being able to file bankruptcy, or running into unintended consequences from doing so. Bankruptcy usually takes planning, and when done properly, can be an uneventful experience.

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