A common misconception that many in Hernando Count have regarding bankruptcy is that it is just an easy way for you to not have to pay your bills. We here at The Day Law Office have even spoken with potential clients who have been told that through a bankruptcy’s automatic stay, any collection efforts that have been initiated against them must cease. Yet while the automatic stay does indeed keep certain creditors from coming after you, it may not signal the end of having to deal with others.
Once you have filed your bankruptcy petition, the court does place an automatic stay on certain collection activities. These include efforts to foreclose on your home (or to evict you from a property), having your utilities disconnected, or having your wages garnished. However, bankruptcy will not stop the collection of any unpaid taxes, or any fines or expenses related to criminal proceedings. It will also not stop the repayment of any loans you may have taken from retirement accounts. According to the U.S. Bankruptcy Code, your bankruptcy filing will also not affect any actions related to spousal or child support, such as:
- The establishment of paternity
- Modifying a domestic support obligation
- Divorce proceedings (expect in cases where the division of property would affect the bankruptcy estate)
- Determining custody and visitation
- Dealing with allegations of domestic violence
A creditor that has been halted from pursuing collection efforts against you by an automatic stay may also petition the court to lift it. To do so, it must show that with the stay in place it will continue to lose money, and that lifting the stay would offer no financial benefit or harm to other creditors. More information on dealing with debts through bankruptcy can be found here on our site.