A Clearwater Bankruptcy Attorney Can Protect Your Rights Under the Automatic Stay Provision
Most attorneys will inform you that once you file a bankruptcy petition, an automatic stay will come into operation and your creditors can no longer contact you or take steps to recover their dues. However a Clearwater FL bankruptcy attorney will inform you that there are exceptions to the automatic stay rule. Only experienced bankruptcy lawyers are aware of the exceptions. If you are located in Pinellas County or Tampa Bay and considering bankruptcy to prevent the foreclosure of your home using the automatic stay provision, you should consult with a Clearwater Bankruptcy attorney. A Clearwater bankruptcy attorney is your best source of information about the bankruptcy laws and the procedures of the bankruptcy court.
Exceptions to automatic stay provision
The automatic stay will not apply to:
- Criminal Actions
- Enforcement of Alimony/Child Support Payments
- Action to Perfect or Maintain a Purchase Money Security Interest
- Enforcement of Governmental Regulatory and Police Power
- Withholding, suspension or restriction of a driver’s license
- Actions against non-debtors. However stay applies if non-debtor is an alter ego.
Merely giving notice of default is not a stay violation. But if the notice terminates your contract, then it is a violation of the stay. Any notice threatening legal action if the default is not cured will also amount to a violation of the stay.
The automatic stay will not apply to post-petition claims that arise from the trustee’s operation of the debtor’s business. If foreclosure sale is completed before filing, property is out of the estate and no longer subject to the stay. The stay does not extend redemption periods beyond that allowed by § 108(b).
The provisions of the bankruptcy code are meant to help you get out of debt by discharging your debts and to give you a fresh start. But bankruptcy laws are complex. A Clearwater bankruptcy attorney can help you navigate this complex maze.
Violation of Stay
Initially violations of the stay were dealt by contempt actions. But, changes to the bankruptcy law in 1984 allowed damages to be awarded to debtors injured by “willful” violations of the stay. Contempt probably is an alternative basis to sanction violations of the stay. However, exercise of contempt authority by bankruptcy court has doubtful statutory basis. Any action taken in violation of the stay can be invalidated by the bankruptcy court. The action that violates the stay can be “voidable” if violation is merely “technical”. A Clearwater bankruptcy attorney can help you get damages for willful violations of the stay provision by your creditors.
Stay relief
Creditors can seek relief against the stay in both Chapter 7 and Chapter 13 proceedings.
A creditor can seek a stay relief if there is an existence of debt (that is, amount) and lien (including proper Perfection or recordation) and
- There is existence of “cause” for stay relief, including lack of adequate protection, or
- The debtor lacks equity in the collateral.
In a Chapter 13 proceeding besides the above conditions, a creditor can also seek a stay relief if the collateral is not necessary to an effective reorganization.
To seek a stay relief, the creditor must file a motion. A preliminary hearing must be held within 30 days of the filing of the motion. If the court orders the continuation of the stay at that preliminary hearing pending final hearing, the final hearing must be concluded not later than 30 days after the conclusion of the preliminary hearing. The court must rule within 30 days after the commencement of the final hearing.
Some courts will not continue to exercise jurisdiction over collateral once stays have been lifted. This can be significant in some instances. For example, suppose a creditor obtains stay relief on a car, the debtor refuses to surrender the vehicle, and it cannot be repossessed without a breach of the peace. Arguably, the creditor’s only remedy is to seek possession through the state courts. It may be quicker and easier if the bankruptcy court could order turnover as an enforcement measure of its original stay relief order. Accordingly, former Chief Bankruptcy Judge William A. Scanland of the District of Arizona (Tucson, retired) has stated that if a debtor is required to make collateral available to a creditor following default pursuant to U.S.C. § 9- 503 and the security agreement, the order lifting stays could include language to that effect that could be enforced by the bankruptcy court through contempt proceedings. A creditor may therefore wish to include a provision providing for such turnover in the order lifting stays. A Clearwater bankruptcy attorney can represent you and oppose any motion for stay relief.
If your circumstances have brought you to the place of searching for a qualified, experienced Florida bankruptcy attorney, The Coleman Law Group of St. Petersburg offers you caring and aggressive representation. Dedicated, knowledgeable professionals will help you navigate the often confusing world of the Florida bankruptcy law, and provide a clear path to achieving your goals… freedom from debt and the ability to move forward with the rest of your life.