Deficits of The Automatic Stay

In a certain instances, the automatic stay cannot help you. These occasions include the following:

• Certain tax proceedings. The automatic stay cannot prevent the IRS from auditing you, issuing a tax deficiency notice, demanding a tax return, issuing tax assessments and demanding payment of said assessments. However, the automatic stay will stop the IRS from issuing a tax lien or seizing your property or income.
• Support actions. The automatic stay does not stop any lawsuit against you seeking to establish paternity, nor lawsuits seeking to establish, modify, or collect child support or alimony.
• Criminal proceedings that can be broken down into criminal and debt components will be separated and the criminal component cannot be stopped by the automatic stay. 
• Loans from a pension. In spite of the automatic stay, money can be withheld from your income for repayment of loans from certain types of pensions, including most job-related pensions and IRAs.
• Multiple filings. If you already had a bankruptcy case pending during the previous year, then the stay will automatically be terminated after 30 days; unless you, the trustee, the U.S. Trustee, or a creditor asks for the stay to continue. Also, you must then prove that the current case was filed in good faith, and if a creditor has filed a motion to lift the stay during the previous case, the court will assume that you did not act in good faith, and it may prove difficult to receive the automatic stay in your present case. To often individuals and companies disregard the importance of consulting an experienced attorney and make hasty decisions or in many cases don't take any action. If you have property in the State of Connecticut or Massachusetts, be sure to get legal advice from a Connecticut Attorney.

Richard Croce - Rich@rrc-llc.com