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Few things are more personal in life than your finances.
If your personal or professional relationships are suffering due to overwhelming debt, if you’re losing sleep at night because you’re stressed over your bills, there is a solution to your problems.
Bankruptcy exists to help individuals get a fresh financial start.
If you are faced with debts you cannot afford to pay, if you’re being threatened with serious consequences like foreclosure or wage garnishment, you owe it to yourself to learn more about your bankruptcy options. To that end, our Fort Collins bankruptcy lawyers have designed this website to introduce you to the automatic stay– the powerhouse of protection for bankruptcy petitioners seeking debt relief through Chapter 7 or Chapter 13 bankruptcy in Larimer County.
Of course, this webpage provides just a short overview of the automatic stay. For a more detailed look at how this powerful legal tool can help you with debt relief, please contact our Fort Collins bankruptcy attorneys for a free case consultation. Your first step towards financial freedom is just a phone call or email away.
One of the most powerful benefits of filing for Chapter 7 or Chapter 13 bankruptcy in Larimer county is the automatic stay. The automatic stay is a legal injunction that halts all contact from debt collectors and creditors, leaving you free to follow the terms of the bankruptcy plan without additional pressure and stress. It is a powerful and sweeping way to keep your utilities from being disconnected, and it also has the power to halt repossession and foreclosure. An automatic stay remains in effect for the duration of your bankruptcy case and gives you the time and distance necessary to focus on your bankruptcy without distraction.
Some specific examples of how the automatic stay can help Fort Collins debt relief seekers include
Halts the Foreclosure Process- During our case consultations with prospective clients, the number one question our Fort Collins bankruptcy attorneys get asked is “Can bankruptcy save my home from foreclosure?” While the answer to that question is complicated, an automatic stay does halt foreclosure proceedings during the duration of a bankruptcy case. Any foreclosure efforts are put on hold until the bankruptcy process is complete, giving a homeowner time to catch up on mortgage payments. For more information, see our relevant website on Home Foreclosures and Bankruptcy or contact our Fort Collins debt relief lawyers for a case evaluation.
Allow You to Keep Your Utilities Connected- If you are behind on your utility bills to the point where the power or water companies are threatening to cut off your service the automatic stay can help prevent disconnection for a minimum of 20 days. However you will have to make some attempt to assure the utility company that you can pay future bills, otherwise, your utilities will eventually be shut off once your bankruptcy case is completed.
Halt wage garnishments- Under Colorado state law, no more than 25 percent of a person’s salary can be taken to satisfy court judgments. That doesn’t sound like much until you think about working a 40-hour week and only receiving money for 30 hours of work because that 10 hours’ worth of work was garnished by your creditors to pay off a debt. There are some wage garnishment exemptions that the automatic stay does not cover, which our Fort Collins bankruptcy attorneys would be happy to discuss with you during your case consultation.
Stops Creditor Harassment- Let’s face it, one of the worst parts about significant debt is the constant creditor harassment via letters, e-mails, and phone calls. The automatic stay means that creditors have to communicate with you via your Fort Collins bankruptcy attorney. This means you are spared the incessant collection activity while your finances are sorted out within your bankruptcy case.
Halts Repossession- Many Fort Collins residents use their cars daily– to get to work or school, to see family, or just to enjoy the freedom of the road. Losing a vehicle due to repossession can have dire consequences. If you are behind on payments or a lender is threatening repossession of your car, the automatic stay immediately stops all debt collection actions, including the repossession of vehicles.
The automatic stay offers quick protection for yourself and your family against your creditors and debt collectors, giving you a level of security and peace of mind that you may not have experienced for some time.
We must point out that while the automatic stay can quickly change a person’s life in many positive respects, there are some exceptions that the automatic stay doesn’t cover. Listed below are the most important examples:
Criminal Prosecution- The automatic stay will not stop criminal prosecutions against you if you have violated a criminal or motor vehicle law and are pending litigation for those violations.
Retirement Plan Loans- Any time you borrow from your 401(k) or other retirement loans, the government considers you borrowing from yourself as opposed to a debt you owe to a creditor. If you fail to pay any debt through a 401(k) or other retirement loan repayment then you will have to incur the penalties involved in the early withdrawal of money from your retirement.
Child Support or Alimony- If your paycheck is being garnished for past due child or spousal support, filing for bankruptcy won’t affect those types of garnishments.
Divorce – If you’re going through a divorce while filing for bankruptcy in Fort Collins, be aware that the automatic stay does not stop a paternity action or any lawsuits involving domestic support obligations, child custody, visitation, or other aspects of a divorce case.
Tax Administration- An automatic stay will not protect you from an IRS audit, and cannot stop the IRS from issuing a tax assessment, demanding your tax return, or demanding payment once a tax assessment has been issued.
Once you have filed for either Chapter 7 or Chapter 13 bankruptcy in Larimer County, the automatic stay immediately goes into effect, halting all debt collection actions from creditors. That means that a creditor is not allowed to
Intentionally ignoring the automatic stay is a violation of the Fair Debt Collection Practices Act and may lead to sanctions that can cost creditors thousands of dollars. If any creditor attempts to contact you for the duration of your bankruptcy case, make sure you let your Fort Collins bankruptcy attorney know. They can pass along your complaint to the Court and make sure the proper actions are taken.
If you’ve been considering filing for bankruptcy, you may be out of alternatives.
Perhaps your paychecks are being garnished, you can’t make your mortgage payment, or you are being constantly harassed by creditors. As soon as you file for bankruptcy an automatic stay goes into effect, which requires all collection agencies to cease their attempts to collect on their debts. This means that creditors can no longer garnish your wages, foreclosure proceedings must cease, and creditors cannot contact you.
If you have questions about the automatic stay please contact our Fort Collins bankruptcy lawyers for a free initial consultation to discuss how bankruptcy might help you. We can help you make your dreams of a debt-free life a reality.