In Utah, the “automatic stay” law instantly takes effect upon filing bankruptcy. Essentially, with the automatic stay in effect, all your creditors must stop attempting to collect a debt from you. The automatic stay covers email messages, letters, phone calls, garnishments, foreclosure or repossession efforts, among others.
Is the Automatic Stay Forever?
With a Chapter 7, the automatic stay could last until you’ve discharged all your debts and closed your case. However, your creditors could appeal to the court to lift the automatic stay if they could show just cause. For instance, if you filed for a chapter 7 to avoid foreclosure, but you still failed to make good on your payments, your lender could request for the automatic stay to be lifted since chapter 7 doesn’t directly protect you from foreclosure.
With a chapter 13, the automatic stay could last until your entire bankruptcy case is finished, unless creditors request the court to lift it. For example, your lender could file a motion for the court to lift your automatic stay if you fail to pay your mortgage payments on time. Put simply, your automatic stay could protect you from your creditors for the entire term of your bankruptcy case as long as you pay off your debts on time, every time.
How “Automatic” is the Automatic Stay?
If you filed for two bankruptcies in the span of 12 months, the automatic stay granted for your second bankruptcy case would only stay in effect for 30 days. With this, you’d be able to get your plans in order or discharge your debts; otherwise, your automatic stay would be lifted. You could, however, appeal to the court to have the stay imposed if you could give them just cause, says a top bankruptcy attorney in Salt Lake City.
On the other hand, if you file for more than three bankruptcies in a period of 12 months, you won’t be given the privilege of an automatic stay. But you could request the court to impose the automatic stay if you could give them reasonable cause. Regardless of the number of times you have filed for chapter 7 or chapter 13 bankruptcy, it’s in your best interest to consult a qualified attorney to make certain that your rights are upheld in court and that your assets are protected.