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What is a Automatic Stay?
When a debtor files for bankruptcy, whether it be under Chapter 7 or 11 and whether it be a voluntary or involuntary filing, “all entities” are automatically and immediately stayed from taking any action or continuing any legal action against the debtor.
This includes attempts to collect debt from the debtor by any party. This also applies to the enforcement of liens against the debtor’s property.
This stay also relates to repossession of property. If the creditor had repossessed property prior to the filing of the case but had disposed of it by sales, the creditor could, and the key word here is “could”, be required to make restitution of that asset to the bankruptcy estate.
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- Explore all options in Bankruptcy
- Involuntary Bankruptcy: Good or Bad
- Watch out on Collection of Bankruptcy Account
- Commercial Collection, Bankruptcies: Chapter 7
- Remembering 9/11
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