If you need to file for bankruptcy in Maryland, you can decide whether Chapter 7 or Chapter 13 is more appropriate for you. Once you have filed, you will get an automatic stay. If this is your first time filing bankruptcy, you may be unfamiliar with the process. It helps to understand the purpose of an automatic stay.
What is an automatic stay?
An automatic stay takes effect after you have filed for bankruptcy. It puts a stop to any collection requests, foreclosures or repossessions as well as contact from your creditors to request payment for debts.
What does an automatic stay cover?
If you get an automatic stay, it can suspend a number of things related to your debt. If you had the debt prior to filing for Chapter 7 or Chapter 13 bankruptcy, the following are suspended with the automatic stay in effect:
- Foreclosure on your home
- Eviction from your rental property
- Disconnection of your utilities
- Wage garnishment
- Repossession of your vehicle
However, automatic stays don’t apply to every debt. You cannot eliminate alimony payments, child support orders, some taxes or criminal penalties with the stay.
How long does an automatic stay last?
After you have filed for bankruptcy, the automatic stay should last until your case is closed. It also stays in place until your case is dismissed or you get a discharge of your debt. However, the judge can lift it at a creditor’s request if the creditor files a motion for relief or if an item is no longer part of a bankruptcy estate.
An automatic stay can remain for a shorter time or may not even come into play if you file bankruptcy too soon after a prior dismissal. In that case, the stay only applies for 30 days. There is no automatic stay if you file bankruptcy for a third time in a year.