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Bankruptcy

automatic stays

The automatic stay provides a period of time in which all judgments, collection activities, foreclosures, and repossessions of property are suspended and may not be pursued by the creditors on any debt or claim that arose before the filing of the bankruptcy petition. A stay of creditor actions against the debtor automatically goes into effect when the bankruptcy petition is filed. The stay provides a breathing spell for the debtor, during which negotiations can take place to try to resolve the difficulties in the debtor's financial situation.

In Montana, as in all states across the United States, the automatic stay is a fundamental provision of the federal Bankruptcy Code (11 U.S.C. § 362). When a debtor files for bankruptcy, the automatic stay immediately takes effect, halting most creditors from continuing with collection actions, including lawsuits, wage garnishments, or even contacting the debtor to demand payment. This stay applies to actions against both the debtor and the debtor's property. The automatic stay is designed to provide a 'breathing spell' for the debtor, during which time the debtor's assets are protected while a plan is developed to pay off debts or discharge them through the bankruptcy process. Creditors can, in some cases, request the court to lift the stay if they believe their interests are unjustly harmed. It's important to note that certain types of debts and actions are not stayed, such as criminal proceedings and some family law issues.

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Bankruptcy

automatic stays

As a LegalFix Member You Will Be an Important Client of Local Law Firms

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Montana State Code

Montana State Code

Bankruptcy

automatic stays

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