Actions Not Stopped By the Automatic Stay in Bankruptcy

The automatic stay in bankruptcy stops most collection activities by creditors. This stops harassing telephone calls by debt collectors, reporting debts to credit bureaus, threatening letters and lawsuits. This generally applies to anyone collecting credit card debts, medical debts, attorneys' fees, debts from breach of contract or legal judgments. While a bankruptcy will stop a foreclosure regardless of what Chapter is filed, in a Chapter 7 bankruptcy the creditor can request a lift of the stay and proceed with the foreclosure. In a Chapter 13 the foreclosure may be permanently stopped. Vehicle repossessions are similar to foreclosures. Filing a Chapter 7 will stop a repossession, but if you are behind in payments and cannot catch up, the lender can request relief of stay or wait for the conclusion of the bankruptcy to repossess the vehicle. A Chapter 13 bankruptcy will allow a debtor to repay the arrearage as part of the plan saving the vehicle. The automatic stay will not prohibit legal proceedings related to divorce or parenting issues such as child support and alimony, child custody and visitation, paternity, domestic violence, withholding, suspension or restriction of drivers' and professional licenses to collect child support. The stay will also not apply to criminal proceedings, tax audits, tax deficiency notices, demand for tax returns from the IRS, tax assessments, demanding payment of an assessment or pursuing a co-debtor for taxes owed. The stay does not prevent withholding from a debtor's income to repay a loan from an ERISA-qualified pension plan. The stay will not stop an eviction if the landlord obtained a judgment for possession before the tenant filed for bankruptcy or if the tenant is being evicted for endangering the property or illegal use of controlled substances.