Automatic Stay Lawyer in Loveland, Colorado
Ensuring Your Protections are Upheld in Loveland
With the economic and financial climate across America today, more and more people are concerned about how they will be able to pay their bills, square their accounts with creditors, and pay for their mortgage. As the entire world recovers from the effects COVID-19 had on society and the economy, you may be wondering what debt relief avenues are available to you during these uncertain times.
Luckily, there are protections available to you if you are facing debt collection requests from various creditors. Many people struggling with debt, much like you, are hounded daily by debt collectors or are having their wages garnished to pay off their creditors. By filing for bankruptcy, you have a protection called “the automatic stay” that can help you put an end to harassment from debt collectors, put a stop to paying your creditors, end wage garnishments, and halt any repossessions from taking place. Contact Holland Law Office today so we can brief you more about the automatic stay and how it may be able to help your particular situation.
What is the Automatic Stay?
Simply put, the automatic stay is a legal provision and protection that stops creditors from pursuing debt collection on debtors like you. For example, if you have missed payments on a car and you are constantly being harassed by a debt collector asking for what you owe on the car, the automatic stay prevents creditors from calling and harassing you, and does not make you liable to make payments to your creditors.
On top of stopping harassment from debt collectors, the automatic stay is extremely useful in preventing wage garnishments from taking place. With these extra wages in your pocket as you go through your bankruptcy, you can maximize the capital you will have to start fresh once your bankruptcy is finalized. Certain circumstances may affect the automatic stay, so it is best to contact an experienced bankruptcy lawyer to help you navigate your specific situation and see if an automatic stay through bankruptcy is right for you.
Stopping Foreclosure: The Automatic Stay and Real Estate in Colorado
For homeowners in Loveland, Colorado, facing foreclosure proceedings—a process handled by the Public Trustee in Northern Colorado counties like Larimer—the automatic stay is a lifeline that provides immediate legal intervention. The moment your bankruptcy petition is filed with the bankruptcy court, the federal government effectively issues a legal injunction that compels the foreclosing lender to immediately halt all collection activities, including the scheduled foreclosure sale. This can be the single most effective tool to prevent the loss of your property.
However, the effectiveness and duration of the automatic stay depend entirely on whether you file bankruptcy under Chapter 7 bankruptcy or Chapter 13 bankruptcy.
- Chapter 7 Bankruptcy is a liquidation chapter. While the automatic stay stops the foreclosure instantly, it is only a temporary pause, typically lasting three to four months until the case is discharged. Since Chapter 7 bankruptcy does not provide a mechanism to pay back mortgage arrears, the lender will likely file a Motion to Lift the Stay shortly after the filing. This temporarily buys the homeowner time to negotiate a loan modification or plan their exit, but it usually does not save the home unless the debtor is current on payments and has significant assets to protect.
- Chapter 13 Bankruptcy is the restructuring chapter and is the preferred method for saving a home. The automatic stay initiates the protection, and the subsequent repayment plan allows the debtor to pay all missed mortgage payments (the arrears) over a period of three to five years, while simultaneously making all new regular payments on time. As long as you adhere to the court-approved plan, the foreclosure is permanently stopped. An experienced automatic stay lawyer in Loveland can determine the best chapter for your financial situation during your free bankruptcy consultation.
Duration of the Automatic Stay: Understanding Time Limits in Chapter 7 vs. Chapter 13
One of the most common questions people struggling with financial problems ask is how long the protection of the automatic stay lasts. While the stay is immediate upon filing for bankruptcy, its duration is not indefinite and is governed strictly by the chapter of bankruptcy filed and the debtor’s property situation. Understanding these timeframes is essential for establishing a solid financial future.
In Chapter 7 bankruptcy, the automatic stay remains in effect until the court grants the discharge, which typically happens within three to four months of filing. Once the discharge is entered, the stay ends because the unsecured debts are wiped out, and the creditors no longer have a claim to collect. For secured debt (like a car loan or mortgage), the stay lifts, and the creditors can resume collection activities if the debtor has not reaffirmed the debt or surrendered the property.
In contrast, the automatic stay under Chapter 13 bankruptcy is designed to last much longer—for the entire duration of the court-approved repayment plan, which can be anywhere from three to five years. This extended period is necessary to allow the debtor to make up payments on secured debt and unsecured debts through the trustee. The attorney uses the extended stay to protect the debtor’s property while they execute the plan. Furthermore, if you have had multiple bankruptcy filings in the last six months or year, the automatic stay may be limited to just 30 days or may not take effect at all, requiring a separate motion to the court. This complexity underscores why people file with a qualified bankruptcy lawyer to manage the process correctly from the start.
Can My Automatic Stay Be Lifted?
Just as you are allowed to stop creditors from harassing you and collecting debts through an automatic stay, creditors have the ability to file for a motion to lift the automatic stay so they can continue collecting their debt from you. However, this must be granted by the court and isn’t always guaranteed. In general, many creditors that file a motion for the automatic stay to be lifted are attempting to proceed with a foreclosure action or involve a dispute between a tenant and landlord. We can provide you with the legal support you need to stay in the know about your automatic stay and any actions being taken by creditors to have your automatic stay lifted.
Defending Against the Motion to Lift Stay: Proving Creditor Bad Faith
Although the automatic stay is a powerful federal government injunction, it is not absolute. Secured creditors—especially those holding a lien on a debtor’s property like a home or vehicle—can and often do file a Motion for Relief from the Automatic Stay with the bankruptcy court. This motion asks the court to lift the stay so the creditors can resume their foreclosure or repossession proceedings. As your automatic stay lawyer in Loveland, our job is to fight these motions to protect your interests.
A creditor typically has two primary legal arguments for lifting the stay: lack of adequate protection or lack of equity. Lack of adequate protection means the creditor believes their collateral (e.g., your car) is losing value faster than you are paying off the loan, essentially jeopardizing their security interests. We defend against this by arguing that the property value is stable or by offering proof of insurance and a sufficient down payment in a Chapter 13 bankruptcy plan. Lack of equity means the value of the property is less than what is owed, and the property is not necessary for an effective reorganization.
Our bankruptcy attorneys look for procedural flaws in the creditor’s filing and argue on your behalf. We will demand proof of the creditor’s standing (that they actually own the debt), verify the accuracy of their figures, and demonstrate that the property is necessary for your reorganization in a Chapter 13 bankruptcy. The ability to successfully answer and defend against the Motion to Lift Stay is one of the most critical aspects of consumer bankruptcy law, especially for clients in Loveland and Fort Collins seeking to avoid losing their home or car to collection agencies. This level of legal representation is often the difference between successful debt relief and losing valuable assets.
Are Any Creditors Exempt from The Automatic Stay?
While the majority of consumer creditors are restricted from harassing you or collecting debt that you owe after the automatic stay has been put into place, other creditors are exempt from the automatic stay, without the need to file a motion to lift the automatic stay. These creditors include, but are not limited to, child support, alimony, unpaid taxes, and criminal proceedings. If you are in a situation where you owe money to those creditors or entities, your automatic stay may not be enough to cover you. However, speaking with a lawyer can clarify your financial position, and we will take the necessary steps to make sure you get the best support possible for your case.
What Are the Next Steps I Should Take?
Filing for bankruptcy can provide you with many solutions for your financial ills, including giving you the ability to protect your assets moving forward. With the automatic stay at your disposal, you can say goodbye to unwanted debt collector calls and a brighter outlook for your financial life. Call Holland Law Office today at 970-205-9690 to schedule a free debt strategy session.
