What is an automatic stay under Chapter 13 Bankruptcy?

An automatic stay is a legal protection that goes into effect when a debtor files for Chapter 13 Bankruptcy in New York. It is an order from the court that prevents creditors from attempting to collect debts from the debtor, including wage garnishments, foreclosures, and repossessions. The automatic stay is important because it allows the debtor to get their finances in order and reorganize their debts without the fear of creditors coming after their assets. It also helps the debtor keep their property, such as a house, from being sold. An automatic stay doesn’t last forever though. It ends either when the court grants a discharge of the debtor’s debts, or if the debtor later changes their bankruptcy filing to liquidation or dismissal. Filing a Chapter 13 Bankruptcy petition in New York is the only way to obtain an automatic stay. However, a person should speak with a lawyer to make sure that they understand all the potential benefits and risks associated with filing for Chapter 13 Bankruptcy.

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What is an automatic stay under Chapter 13 Bankruptcy?

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