Getting behind on your bills can be incredibly stressful. Concerns about keeping your home, your car and your way of life can keep you up at night.
Creditors who constantly attempt to collect on bills you have no way to pay do not help lower your stress. One of the benefits of filing for bankruptcy is that creditors cannot continue to harass you.
What is an automatic stay?
A stay is a court order that forbids creditors from taking any action to collect on debts while the stay is in force, including foreclosure, garnishments, lawsuits or any other collection activity. When you file for bankruptcy, the court enters a stay automatically as part of the filing process, hence “automatic stay”.
How long can an automatic stay be in effect?
In the state of Maryland, an automatic stay can last anywhere from 30 days to five years. Generally speaking, the stay lifts when the bankruptcy process is complete.
Are there exceptions to the automatic stay?
Since not all debt and collection activities are the same, there are exceptions to the automatic stay. Some actions that are allowable while a stay is in effect include:
The government can keep income tax refunds to offset any further tax liabilities. Tax audits, deficiency notices, and demands for tax returns are all permissible during a stay.
Family Court Matters
If you currently have a case in family court, your stay will not apply to efforts regarding:
- Divorce proceedings
- Child support or alimony
- Child custody and visitation
- Domestic violence cases
If you are facing undue stress from creditors and their collection efforts, filing for bankruptcy can provide relief.