An automatic stay, which generally becomes effective once a bankruptcy is filed, stops all collection actions against the debtor.
But the automatic stay will end once one of the following events occur:
The Bankruptcy Case is Closed in a Chapter 13 Case
For example, if a debtor withdraws a bankruptcy petition then the case would be closed and the automatic stay would be lifted and collection actions against the debtor would begin again. The bankruptcy case could be closed by the court or trustee.
The Bankruptcy Case is Dismissed
For example, the bankruptcy court has determined that the debtor is not eligible to file bankruptcy and dismisses the case. In this case also, the automatic stay is lifted and debt collection actions would resume.
The Debtor is Granted or Denied a Bankruptcy Discharge in a Chapter 7 Case
If the debtor is granted a bankruptcy discharge, then those debts that were not dischargeable would probably be placed back into collections (i.e. student loans, child support). If the bankruptcy is denied, the automatic stay is lifted and all creditors would resume collections against the debtor.
Have Any More Bankruptcy Questions?
If you have any questions regarding the bankruptcy process we are always here to help. Feel free to contact us
today to ask any questions you may have or simply set up a free consultation.