As per the new bankruptcy laws, the automatic stay has now been defined in a different way for separate situations. However, before we look into those specific circumstances, it is important for you to understand what this legal stay means and what are its applications, per article of Bankslaw.org.
Automatic Stay And Its Applications
If you owe certain debts to a creditor and do not repay the same in a timely manner, the creditor may try to harass you for the repayment. The collection call agencies are usually very good in this regard. Creditors want their money back, generally at any cost. When they find that you have stopped making the repayment, they hire these agencies. The collection agencies will harass you through mail or over the phone. However, filing bankruptcy brings an automatic legal stay that instantly stops all collection proceedings against you. As soon as you file your application, the creditors are legally restricted to stop even the foreclosure proceedings. What is more, this legal stay also stops the lenders from going ahead with any pending lawsuits against you. They are also lawfully forced to stop garnishing your wages. However, as per the new bankruptcy laws, the level of protection varies depending upon the specific cases. Let me give you a brief insight into the same.
Statement Of Intent
In case of a secured debt, the court requires you to submit a statement of intent within 30 days of filing your case. In this statement, you have to explain your plans to deal with such debts. If you fail to submit this statement to the bankruptcy court within thirty days, the automatic stay will be taken away, but only with regard to the secured creditors. However, as per the new bankruptcy laws, the trustee still has the right to ask the courts to extend the automatic stay if they think it proper.
Second Time Filing
If it is the second time you are filing under chapter 7 or 13 within a year, the court will not consider your second attempt in good faith. It will provide you limited automatic stay that is usually not more than 30 days. However, as per the new bankruptcy laws, if within this period, you prove that your filing is genuine, the court may rethink about extending the stay.
Third Time Filing
However, if it is third or fourth time that you are filing your petition, the court will not allow you an automatic stay at all. At the first look, the frequent filing of bankruptcy cases does not look genuine. Therefore, if you are filing for the third or fourth time in a row, you will have to prove to the court that the reason you are filing for chapter 7 or chapter 13 bankruptcy is genuine and in good faith.
However, as per the new bankruptcy laws, such proceedings usually takes time as you would have to convince the court about that the validity of your repeated filings and you may not be able to enjoy the best advantages of the automatic stay.