When debtors in Florida or throughout the country file for bankruptcy, they are generally granted an automatic stay. The automatic stay generally prevents creditors from contacting debtors until their cases are over. Creditors may also be barred from foreclosing on a home, repossessing a property or filing a lawsuit related to an unpaid debt balance while a case is still ongoing. However, it is not unheard of for creditors to violate automatic stays either accidentally or intentionally.
For example, a creditor may contact a debtor because the lender wasn’t aware that the debtor had filed for bankruptcy. Furthermore, creditors may not understand what their obligations are to a party that has filed for bankruptcy after a petition has been filed. It is important to note that lenders and others who are owed money are entitled to ask for information regarding a bankruptcy proceeding.
Creditors that violate an automatic stay may be required to return any assets that were repossessed from a debtor. They may also be required to pay any damages that an individual incurred because of a creditor’s illegal activities. Individuals may be able to minimize the chances that a stay is violated by letting creditors know about the case as soon as possible. This may be done by sending a copy of the notice to file to a creditor by certified mail.
Those who are struggling to pay off a car loan or credit card debt may be able to reduce or eliminate what they owe by filing for bankruptcy. Under Chapter 7, most unsecured debt balances are often discharged in a matter of months. There are eligibiity and other requirements that an attorney can explain.