If an aggressive creditor has threatened to attach or “garnish” your assets or income, your Chapter 7 case should be filed immediately.

Why? To take advantage of the protection from creditors that accompanies the filing of a Chapter 7 case. This advice also applies if a foreclosure action has been filed against your home - it may be necessary to file your case immediately in order to protect your interest in the property.

Cause your creditors to ‘STAY’ back

The filing of a Chapter 7 case automatically suspends virtually all collection and other legal proceedings pending against you. A few days after a Chapter 7 case is filed, the court will mail a notice to all creditors ordering them to refrain from any further action against you. This court-ordered suspension of creditor activity against the person filing is called an automatic stay.

If necessary, notice of the automatic stay may be served on a creditor earlier by the person or the person’s attorney. Any creditor who intentionally violates the automatic stay may be held in contempt of court and may be liable in damages to the person filing.

Is there anything that the automatic stay does NOT cover?

Criminal proceedings and actions to collect domestic support obligations from exempt property or property acquired by the person after the Chapter 7 case was filed are NOT affected by the automatic stay.

The automatic stay also does not protect cosigners and guarantors of the person filing, and a creditor may continue to collect debts from those persons after the case is filed.

As an experienced New York and Pennsylvania bankruptcy attorney, I know how complicated is it to navigate a bankruptcy. My goal is to have my clients go through the process with as little stress as possible - and the best chance for future financial success.

I have much more information to share about Chapter 7 bankruptcy - check out some of my other posts on the subject and visit the NY Bankruptcy Blog again soon as I will continue to post on this topic.

Thanks for reading and let me know if you have any questions,

Matt
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Matt Hughson

New York Bankruptcy Lawyer

Ziff Law Firm, LLP
303 William St., Elmira, NY 14901
Tel: (607) 733-8866
Fax: (607) 732-6062
Toll Free: 1-800-943-3529
Email: mhughson@zifflaw.com
Web: http://www.zifflaw.com

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