UMBRELLA OF PROTECTION
When people file a bankruptcy case they are immediately provided protection from the activities of creditors. Certain activities involve foreclosure, repossessions, collection attempts, set-offs, liens against property, and the freezing of assets. The source of this protection is provided for under the Automatic Stay provisions in the Bankruptcy Code under 11 U.S.C. § 362(a). This invisible umbrella of protection from creditor activities is by far the most important aspect of Bankruptcy. However, there can be instances where the umbrella begins to leak and the protection can disappear leaving you all wet.When people file a Bankruptcy they understand that they are filing to keep items that are important to them. This more than likely involves a house and/or car. Although people enjoy the initial gratification of the Automatic Stay provision when they are able to prevent the foreclosure on their home or stop the repossession of their car, they sometimes don’t understand that in order to keep the power of the Automatic Stay in place, they have to meet their financial obligations during their Bankruptcy case. This can be better understood when a person files a Bankruptcy to protect their home. Read more about filing bankruptcy here: http://www.bankruptcyhome.com/filing-bankruptcy.htmAlthough a Bankruptcy, specifically a Chapter 13 Bankruptcy, allows you to make a small monthly payment to cure any delinquency owed to your mortgage company prior to filing your case, you must remain current on your mortgage payments moving forward, in most instances thirty (30) days after filing the Bankruptcy case. Failure to maintain your current mortgage payments after filing a Bankruptcy is the quickest way to have the Automatic Stay removed in your case, inevitably leaving your house in a position where it can be foreclosed on again.Another instance where the Automatic Stay can be terminated in a Chapter 13 Bankruptcy case is if you are not making your reorganization (plan) payments to the Chapter 13 Trustee. The creditors entitled to payments under your plan, such has the mortgage company for money owed on missed mortgage payments prior to filing your bankruptcy case, or the car creditor that you are making a monthly payment to your Trustee on, can file a special Motion in the U.S. Bankruptcy Court to have the protection of the Automatic Stay removed from your piece of property so that creditor can seek to repossess or foreclose on the property item as they originally intended to do before you decided to file for Bankruptcy relief. If the succeed in getting the protection removed, then you are back to where you started before ever filing your case, and the ability to put that property under the umbrella of protection of the Automatic Stay is almost impossible. Read more about Chapter 13 Bankruptcy here: http://www.bankruptcyhome.com/chapter13.htmIt is important to understand that even though you are protected from your creditors initially upon the filing of a Bankruptcy case that can change. A Bankruptcy is a last chance for many to either reorganize their debts or try to get some financial relief. However, if you are unable to maintain your financial responsibilities while in the Bankruptcy case, then you are more than likely going to lose the item that you filed the Bankruptcy case to protect. For some this is a second bite at the apple to keep their home or cars, but for others this can be a very hard lesson to learn.
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