Filing for bankruptcy is an effective way to prevent the loss of secured assets, such as vehicles and homes, if you are falling behind on payments. The primary mechanism, called the automatic stay, comes into immediate effect when you file for relief in Bankruptcy Court.
Under federal law, the stay places an immediate halt on creditor actions, such as repossessions, foreclosures, collection calls, and wage garnishments, allowing you time to reorganize your finances. Contact our proficient bankruptcy attorneys for help preventing repossession during bankruptcy in Houston.
What Is a Motion To Stay?
The automatic stay is a temporary measure to prevent creditors from calling for owed debt or seizing property. However, it also provides different forms of long-term protection, depending on the type of bankruptcy you file, and creditors must seek the court’s permission to lift the stay before they can resume action.
While state law follows federal bankruptcy rules, it also has some of the most generous state-specific exemptions nationwide. Exemptions could protect you from the liquidation of your vehicles and other property to pay off creditors. Nonetheless, the stay may only last for 30 days if you have had another bankruptcy case dismissed within the previous year, and when there is more than one dismissal, the court may deny granting the stay without evidence of good faith.
Chapter 7
Chapter 7 bankruptcy, often called liquidation, provides an automatic stay. This immediate pause lasts typically three to six months or until discharge. Staying current on post-filing payments is usually necessary to maintain your vehicle in the long term.
You could also sign an agreement with your lender to reaffirm the debt, continuing the original loan terms. However, understanding that your lender may quickly seek to lift the stay if you are significantly behind on payments is essential.
Chapter 13
Chapter 13 bankruptcy is like a repayment plan, and the automatic stay to protect property, such as vehicles and homes, is more effective, lasting for the entirety of the three- to five-year repayment plan. This involves the debtor proposing a payment plan that, once approved by the Bankruptcy Court, allows you to make payments while keeping your car without reaffirming the debt.
A seasoned attorney could review your case and help you prevent reclamation of your property by considering all available protections under Houston bankruptcy law.
Protections Under a Stay
The length of the motion to stay depends on the type of relief you file for and your history of past filings. Under 11 United States Code § 362, the stay prevents certain actions from occurring until the court discharges the case or creditors successfully petition to lift the stay. These include:
- Repossession of cars and other personal property
- Creating or enforcing liens against any property tied to the case
- Foreclosure actions against a primary residence or other real estate
- Initiating lawsuits or continuing most legal proceedings against the debtor
- Wage garnishment or withholding any of the debtor’s income to pay the debt
- Phone calls, harassment, and other communication attempting to collect the debt
You could also receive temporary relief from eviction, and a judge may hold the creditor in contempt of court if they knowingly violate the statute. During a consultation, our experienced Houston lawyers could answer your questions regarding how to stop repossession during bankruptcy.
Talk to a Houston Attorney About Preventing Repossession During Bankruptcy
Immediately after you file for relief, the bankruptcy court issues an injunction, known as an automatic stay, to prevent creditors from taking specific types of action. Understanding how to successfully navigate this process is essential.
Our hard-working and skilled lawyers could help you identify the best ways of preventing repossession during bankruptcy in Houston. Call Allmand Law Firm, PLLC, today to schedule an appointment to learn more about how to protect your rights and your assets.
