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How long does an automatic stay last in a consumer bankruptcy?

On Behalf of | Jun 21, 2021 | Consumer Bankruptcy |

Choosing to file for bankruptcy in Chicago, Illinois, can be difficult. At the same time, if you are struggling to pay your debts to your creditors and have tried other options that failed, it may be your only option. Consumer bankruptcy gives you the ability to make a fresh start with your finances. Once you file, you will have an automatic stay put in place so that creditors cannot try to collect money on your debts while your bankruptcy case is ongoing.

What can you expect with an automatic stay?

Once you have filed for bankruptcy, an automatic stay should take effect immediately. There are a few exceptions to that rule, which includes the following:

  • The collateral property has no equity. If there’s no equity in a property because its value dropped to less than what you owe, the creditor may be able to prove you caused the value to drop due to not upkeeping it.
  • The stay isn’t essential for reorganizing your finances. The automatic stay in a consumer bankruptcy can be lifted by the court if creditors can prove you’re able to reorganize your finances without it.
  • There is evidence of bad faith, or the collateral has no protective measures.
  • Other procedures are needed.
  • You’re a serial bankruptcy filer. If you file for bankruptcy too frequently in a short amount of time, the automatic stay can be lifted.

What can lead to an automatic stay termination?

How long an automatic stay lasts when you file for bankruptcy depends on other factors as well. If collectors are after you instead of your property, the automatic stay typically lasts until you receive a discharge. Creditors can then return to collecting on debts that aren’t discharged.

Who can help you?

An attorney can help you with your consumer bankruptcy case and help you file. A lawyer can advise you on what you can expect with the automatic stay in your case as well.