automatic stay Tag Archives — Securities Fraud Lawyers Blog

What is bankruptcy?

Published on: April 26, 2015 | by Savage Villoch Law, PLLC

Bankruptcy is a federal law that allows people and businesses (even cities and municipalities) to manage or eliminate debt. Bankruptcy is available to most everyone, and you do not even need to be insolvent to file. Bankruptcy is important because it imposes an immediate “automatic stay” on all creditors, and these creditors must stop all collection efforts. If the creditors continue to call, send letters, file lawsuits, etc., those creditors are in violation of bankruptcy law and could be fined or required to pay sanctions. This automatic stay gives the bankruptcy filer (or debtor) a breathing spell.

There are different chapters of bankruptcy depending on your needs or factual situation. There are Chapters 7, 9, 11, 12, and 13. The most common chapters for everyday consumers are Chapters 7 and 13.

Chapter 7 provides a discharge of certain debts if the debtor agrees to give up all of his or her non-exempt property to a trustee for sale for the benefit of the debtor’s creditors. Most people will find that there are very little to no assets available for creditors after the exemptions. For example, in Florida, a person’s home can be exempt, retirement accounts can be exempt, up to $1,000 of a person’s vehicle can be exempt, property held jointly with a non-debtor spouse can be exempt, etc.

I haven’t been able to pay my bills. Could I lose my car?

Published on: October 19, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, with Savage, Combs & Villoch, PLLC

If you miss car payments, the company that loaned you the money to purchase the car can likely take back your car in what is called “repossession.” The right to take back your car for nonpayment usually comes from the terms of the signed loan paperwork when you buy your car. Usually, a few missed payments and the loan company will start calling you and sending you warning letters. Warning calls and letters will ultimately lead to repossession. Once the loan company repossesses, it can then sell your car at an auction and apply that money to pay down the amount that you still owe. This can also happen with car title loans (e.g., where you receive a loan and agree to give the loan company your car title as security and part of your promise to pay back the loan. This is called a security interest). In situations where the car is part of your promise to pay back a loan, the answer is “yes”: you could lose your car if you don’t make your car payments. Bankruptcy can immediately stop this process.

If you haven’t paid other bills, like a credit card or a payday loan, you could still lose your car, but the situation is a bit different and the company must take a few extra steps. For example, the company must first sue you to get a judgment in court. With a judgment in hand, the company can then apply to the court to have the sheriff take your car and sell it. This process is similar to repossession and is called a writ of attachment. The company would then use the money from the sale of your car as payment down on the amount that you owe. Bankruptcy can immediately stop this process too.

If I file bankruptcy, will it stop the foreclosure of my home?

Published on: August 30, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, Esquire, at Savage, Combs & Villoch, PLLC

If you’re a few months behind on your mortgage payments, the bank that loaned you the money to purchase your home (or alternatively, the company that services the loan) will likely file a lawsuit with the intent to sell your house and use that money to pay down your loan. If the money achieved from the sale is not enough to pay down the entire loan, the bank can still pursue you for the remainder owed or the deficiency. This process is commonly called foreclosure and the pursuit of a deficiency judgment.

If you file bankruptcy before the foreclosure sale, however, you will get temporary relief from the foreclosure. Specifically, upon the bankruptcy filing, you will get the benefit of the “automatic stay,” which stays all actions of your creditors not brought before the federal bankruptcy court, and this will include the foreclosure action. It is important to understand that this stay is often times only temporary and will depend on how active your bank is in pursuing the foreclosure.