Learning More About the Automatic Stay in Bankruptcy
If you are thinking about filing for Chapter 11 bankruptcy in the Tampa Bay area, it is important to understand the protections offered by this form of bankruptcy. One of the most significant protections is the automatic stay. Under 11 U.S. Code § 362, seeking bankruptcy protection can prevent creditors from taking certain actions against you once you have filed. This also holds true in certain circumstances if you are thinking about filing for personal bankruptcy. To be sure, the automatic stay can come into play in significant ways if you file for Chapter 13 bankruptcy, for instance. We would like to help you learn more about how the automatic stay in bankruptcy works, including situations in which the automatic stay is likely to prevent creditors from taking actions against debtors.
In the meantime, if you have questions or concerns about how filing for Chapter 11 bankruptcy in Tampa may be able to relieve some of your current financial dilemmas, you should discuss your case with an experienced Tampa bankruptcy lawyer. One of our advocates can discuss your options with you today.
Understanding What the Automatic Stay Can Do
The automatic stay can help debtors, especially business owners in the Tampa area, to prevent creditors from taking certain actions that could result in the closure of a restaurant or other South Florida business. What can the automatic stay do you for you? According to 11 U.S. Code § 362, the automatic stay may be able to help you in some of the following ways:
Prevent foreclosure: under § 362(a)(3-5), the automatic stay can stop a foreclosure from happening. If you own your business space or own a home and are filing for consumer bankruptcy, the ability of the automatic stay to prevent foreclosure may in fact be one of the most important tools available through bankruptcy protection. Once your creditor receives notice that you have filed for bankruptcy, it is illegal to continue the process of foreclosing on your property. If your creditor does continue with the foreclosure process, under § 362(k), you may be entitled to recover “actual damages, including costs and attorneys’ fees, and, in appropriate circumstances . . . punitive damages.”
Prevent creditors from moving forward with lawsuits against you: the law specifically prevented “the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case . . . or to recover a claim against the debtor that arose before the commencement of the case.”
Prevent your utilities from being disconnected: for a certain number of days, if you are behind on your utility bills, the automatic stay can prevent your utilities from getting shut off. While this might not seem like a substantial protection, it can allow you to keep operations going once you have filed for bankruptcy protection.
Automatic Stay Cannot Do Everything
While there are many good things that an automatic stay can do for Tampa debtors, there are certain things it simply cannot do. As § 362 of the Bankruptcy Code makes clear, the automatic stay does not apply in some of the following circumstances:
Cannot prevent civil actions concerning parenting and certain spousal responsibilities: as § 362(b)(2) articulates, the automatic stay simply will not prevent legal actions that are intended to establish paternity, to create or modify an order of domestic support, or to create or modify orders concerning child custody and visitation. The automatic stay also does not prevent a debtor from having to make payments on domestic support obligations.
Cannot prevent dissolution of marriage actions: while there may be reasons to stay married during a bankruptcy proceeding, the automatic stay cannot prevent actions aimed at dissolving a marriage.
Cannot prevent audits by the government to determine your tax liability or to make assessments for taxes due.
These examples represent just a handful of things that the automatic stay cannot do. To better understand how the automatic stay can help you when you file for bankruptcy, you should discuss your situation with an experienced Tampa bankruptcy attorney as soon as possible. Contact Samantha L. Dammer, P.A. to learn more about how we can assist you.