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What Is The Automatic Stay? | How To File Bankruptcy in Tennessee and Stop Collections - YouTube
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Hello, I'm James Flexer, an attorney at the
Law Offices of James Flexer. We have three offices
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in the Middle Tennessee area, in Nashville,
in Columbia, and in Murfreesboro, Tennessee.
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We have six lawyers that are dedicated to
bankruptcy and many paralegals to assist you.
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And today I'm going to talk to you about the
automatic stay. The automatic stay is a statute
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under the bankruptcy code. It's a federal
statute: 11 United States Code 362.
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Now the automatic stay is the law that makes creditors
instantly stop trying to collect debt from you
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as soon as you file bankruptcy. The automatic
stay is what is called "injunctionary relief."
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And by "injunctionary," what it does is it
prohibits or stops creditors from being able
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to take any action against you or else they
will be in violation of the automatic stay.
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Now it's kind of like a restraining order,
which some people may be familiar with from
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divorce or domestic cases, where an individual
is restrained from taking any further action
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against, let's say, a husband or wife. Well
the bankruptcy automatic stay is similar in
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that it restrains the creditor from taking
any action whatsoever against you, unless
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they can get permission of the bankruptcy
judge to do so. But in order to get permission
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from the bankruptcy judge, they have to file
a motion for relief from the state or request
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permission from the judge to allow them to
try to collect from you. Now normally, when
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you file a bankruptcy (and they are electronically
filed now), as soon as we electronically file
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it with the federal government, they assign
your case a case number. As soon as that case
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number is assigned to you, there is an automatic
restraining order that's put into place.
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But you do not have to go file for a restraining
order; it's automatic upon filing the bankruptcy.
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If any creditor does attempt to collect from
you after they know about the bankruptcy,
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and sometimes even without knowledge of the
bankruptcy, they are in violation of the automatic stay.
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If they know about the bankruptcy and
still try to contact you, ordinarily our judges
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will sanction or assess penalty or attorney
fees against them for those prohibited acts.
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Now if they don't know about it, the judge
will normally call that a technical violation
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and be less inclined to sanction them. But
they are still in violation of the law and
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cannot do that. If any of your creditors call
you after you file bankruptcy with us,
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you should immediately call our office so we can
contact that creditor and advise them that
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they're breaking the law and that we may very
well take action against them. The automatic stay--
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let's shift gears for a moment, because
the automatic stay also places kind of like
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a force-field over all of your property. As
soon as you file bankruptcy, it's kind of
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like your watching a movie and everything
has to freeze. I use those examples to explain
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that when you file a bankruptcy, the second
you file it, there is once again a restraining
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order that affects every single creditor that
says, "You can in no way take any of this
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debtor's property. You cannot take action
to get their property. You cannot sue them.
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Anything you do has to go through bankruptcy
court." Now that is important, because when
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your property is under the automatic stay,
even a person who is not a creditor is still
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subject to the automatic stay. Your property
becomes property of the United States government;
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it becomes property of the bankruptcy estate
until the bankruptcy trustee abandons the property.
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Now that doesn't mean that someone
is going to come in and take all of your property.
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It means that your property is protected by
the federal law and by, essentially, being
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in a federal bankruptcy estate, and that only
a bankruptcy judge can direct anyone to deal
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with property of that estate. So while that
is happening, you are safe. And you and your
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attorney can determine whether you want to
keep certain property, whether you want to give it back,
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and can of course determine
what you wish to do with your property.
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I've spoken briefly about the automatic stay. We
will talk in greater detail about it in future videos,
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but it is one of the primary and most
important laws in bankruptcy, and it has an
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immediate impact on every single case that
is filed. Thank you for your time. I wish
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if you would like to request books from us,
please go to our website, www.flexerlaw.com,
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or call our office. We will be happy to mail
you books on Chapter 13 and Chapter 7, which
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will help you make an informed decision.
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