What things does an automatic stay not stop?
As we discussed in our previous post this week, the automatic stay in a bankruptcy can put a halt to quite a few different types of proceedings. There are, however, some proceedings that an automatic stay has no effect on. Today, we will point out some of the things that an automatic stay is not able to stop.
As we mentioned last post, wage garnishments generally are halted by an automatic stay. One type of wage garnishment that an automatic stay does not block however is a wage garnishment that is done to get repayment on a loan that was taken out against a pension.
Generally, money-seeking lawsuits against a debtor are stopped by an automatic stay. An exception to this though is child support-related lawsuits. A lawsuit aimed at establishing child support payments, modifying child support payments, collecting child support payments or establishing paternity will not be halted by an automatic stay.
Things are a little tricky when it comes to IRS tax actions and automatic stays, as some IRS actions are blocked by a stay while others are not. Among the IRS actions an automatic stay does not block are: tax return filing demands, tax payment demands, audits, the issuing of tax assessments and the issuing of tax deficiencies.
There are further things that an automatic stay will not touch. Given that there are limitations on what an automatic stay can do, how big of a help an automatic stay will be to a given bankruptcy filer will depend on what specific sorts of things they are facing and other specifics of their situation. How helpful the automatic stay would be for a debtor can be a factor in whether bankruptcy is the right move for the debtor. Bankruptcy lawyers can provide individuals who are looking into bankruptcy with information on automatic stays and other important bankruptcy-related considerations.
Source: FindLaw, “The Automatic Stay: Stopping Creditors with Bankruptcy,” Accessed March 13, 2015