Utah Bankruptcy Automatic Stay
The Utah bankruptcy automatic stay goes into effect as soon as you file any chapter of bankruptcy. Basically, as soon as you file bankruptcy in Utah all creditors are required by law to cease any attempt to collect a debt. This includes phone calls, letters, email, repossession efforts, foreclosure efforts, garnishments, etc. Most creditors won't know that you filed bankruptcy right away, as it takes a week or so for creditors to receive notice, but the debtor can inform creditors that they have filed bankruptcy by giving them the bankruptcy case number and his/her attorney's contact information.
How long does the bankruptcy stay last in Utah?
In a Utah chapter 7 bankruptcy the stay lasts until the debtor's debts have been discharged and the case has been closed. Creditors can also file a motion to lift the stay if they have good cause. This might be the case if the debtor's chapter 7 bankruptcy stopped a foreclosure, but the debtor does not get current on his payments. The mortgage company can file a motion to lift the stay in order to resume foreclosure proceedings, because a Utah chapter 7 bankruptcy does not protect a debtor from foreclosure.
In a Utah chapter 13 bankruptcy the stay lasts the length of the bankruptcy, unless a creditor files a motion to lift the stay. This might happen if a debtor falls behind on his normal monthly mortgage payments while in bankruptcy. The mortgage company can petition the court to lift the stay so it can start foreclosure proceedings. As long as the debtor stays current on his payments, the stay will remain in effect for the life of the bankruptcy.
Is the Bankruptcy Stay always Automatic?
Sometimes a debtor might file multiple bankruptcies in an attempt to thwart collection of debt, without ever intending to go through with the bankruptcies. There are special rules as to the stay in this situation. If a debtor files two bankruptcies in Utah within 12 months, then the second bankruptcy only has a stay against creditors for 30 days. This will still allow a debtor to get his/her plan confirmed or get the debt discharged, but if the debtor is not on top of things the stay will be lifted and the bankruptcy will not provide much protection. A debtor can file a motion to impose the stay if he/she can show good cause.
If a debtor files three or more bankruptcies in Utah within 12 months, there is no automatic stay. So if a debtor's intent is to stop a foreclosure or other collection of debt, the bankruptcy will not help. Again, a debtor can file a motion to impose the stay if he/she can show good cause.
No matter how many times you've filed bankruptcy, your attorney at Pearson Law Firm can help ensure that your rights are preserved, and will do everything he can to preserve your assets. Contact Pearson Law Firm for a free consultation with an experienced Utah bankruptcy attorney, 801-888-0991.
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Pearson Law Firm, PLLC
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Sandy, Utah 84070