What Is the Automatic Stay in Colorado Bankruptcy?

December 20, 2015

The automatic stay in Colorado bankruptcy is a court injunction that takes effect as soon as someone files a bankruptcy petition with the court. This stay can provide bankruptcy petitioners with some very powerful protections, and understanding how it works and what it can do can be essential to successfully resolving serious debt issues.

The Facts about Automatic Stays in Bankruptcy

  1. A Colorado Springs bankruptcy lawyer explains how the automatic stay in CO bankruptcy works.

    A Colorado Springs bankruptcy lawyer explains how the automatic stay in CO bankruptcy works.

    The protections – The automatic stay will immediately stop creditors from trying to take action against consumers for defaults on outstanding debt. Specifically, this means that the automatic stay will prevent creditors from moving forward with lawsuits, wage garnishments, foreclosures and/or repossessions.

    The intent is that, once someone has officially declared his intentions to proceed with bankruptcy, the automatic stay will prevent creditors from racing to court to take what they can (and possibly leave nothing for other creditors).

  2. The duration of the automatic stay – In general, automatic stays will remain in effect until the bankruptcy case has been resolved or dismissed or until there is no remaining property in the bankruptcy estate.The real takeaway here for people in debt is that it’s important that their bankruptcy petition is in order when it’s submitted to the court; if it is not and the case is dismissed, refiling won’t be able to happen for at least another 180 days, during which time there will be no automatic stay in place. This can open up the opportunity for creditors to move in and continue action against debtors.
  3. Exceptions to the automatic stay – Although automatic stays can be very important components of bankruptcy cases, there are some exceptions to when and how these injunctions can be applied. For instance, automatic stays will not halt criminal investigations associated with a debtor, nor will they shield a debtor from enforcement actions a court takes when child or spousal support payments are in arrears.So, the important thing to remember with this fact about automatic stays is that it’s important to discuss the nature of your debt with a lawyer first to figure out what protections you can benefit from and whether additional action may be necessary to help you resolve your debt issues.

Contact a Colorado Springs Bankruptcy Lawyer at the Law Office of Jon B. Clarke, P.C.

Are you struggling with debt and ready for a financial fresh start? If so, it’s time to contact a trusted Colorado Springs bankruptcy lawyer at the Law Office of Jon B. Clarke, P.C.

To find out more about your best debt relief options, as well as how we can help you obtain the financial fresh start you need and deserve, contact us today by calling (303) 779-0600 or by emailing us using the contact form on this page. We also encourage you to complete our Business or Consumer Debtor Analysis Form so that we can provide you with professional advice that is as specific and helpful as possible.

From our offices based in Denver and Greenwood Village, we provide people throughout Colorado with the highest quality debt relief legal services.

Categories: Bankruptcy, Bankruptcy Planning, Bankruptcy Process