Avoid Mistakes When Planning and Filing Virginia Bankruptcy Cases

The best-planned bankruptcy cases go unnoticed. A few debtors glide through the system without attracting attention and receive full discharges in record time. Luck is not involved, but rather each successful debtor begins planning strategically a few weeks or months in advance. These debtors know something that you don’t.

Free - 2010 Bankruptcy Strategies Explained

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New York Bankruptcy Automatic Stay

In connection with every Chapter 7 & Chapter 13 consumer case  filed for New York bankruptcy, 11 U.S.C. Sec. 362 provides a "stay" of further collection efforts against a debtor's assets. The operation of this legal prohibition is created immediately, without court review, and bars all creditors from even contacting a debtor who is represented by an attorney. After receiving a file number from the clerk, all debtors are immediately protected.

Creditors are assigned the burden of proving debtors are not entitled to protection if and when a motion to lift stay is filed. Bans on legal action act as an injunction that prohibit creditors to begin or continue further collection efforts for a wide assortment of debts.

New York bankruptcy stops real estate foreclosures. With limited exception, all foreclosure actions are prevented whether judicial, non-judicial, filed, threatened or pending. All creditor actions for payment become null, without legal force or effect, and creditors may not recommence legal action unless obtaining specific permission from the court after notice and hearing. Debtors must receive written notice of all motions to lift the injunction and are provided with an opportunity to be heard before the court rules on these motions.

New York Bankruptcy Exceptions

The exceptions to an automatic stay are provided by 11 U.S.C. 362. For example, utility services and debts are covered by a special clause which allows for termination of service after 20 days. Many other types of collection efforts in a New York bankruptcy are prohibited by the automatic stay statute permanently, including the following:

• Garnishment;
• Calls;
• Demand letters; and
• Lawsuits for consumer debts.

Creditors who violate the injunction knowingly are subject to sanctions. The court retains broad authority to prevent further violation and impose fines, civil sanctions, and criminal sanctions against creditors. Often creditors do not have actual notice when a case is filed, yet nevertheless must comply. New York bankruptcy courts tend to be lenient on creditors who violate the stay before actual notice is received. However, after a creditor receives notice, New York bankruptcy courts quickly grow intolerant of violations and sanctions for knowing violations are common.

Qualification for New York bankruptcy relief is not based on US citizenship. Residency within the state, or property ownership within the state may satisfy jurisdictional requirements for consumers seeking relief under Chapter 7 or Chapter 13 of the US Code.

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