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Avoid Mistakes When Planning and Filing Virginia Bankruptcy Cases
The best-planned bankruptcy cases go unnoticed. A few debtors glide through the system without attracting attention and receive full discharges in record time. Luck is not involved, but rather each successful debtor begins planning strategically a few weeks or months in advance. These debtors know something that you don’t.
Free - 2010 Bankruptcy Strategies Explained
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Virginia Bankruptcy - Automatic Stay
In connection with every petition filed for Virginia bankruptcy, 11 U.S.C. 362 provides a "stay" of further
collection of debts from a debtor's estate. The operation of the prohibition is automatically invoked without
the necessity of court review, permission, or
approval. After receiving a file number from the clerk, all debtors are immediately protected.
Creditors are assigned the burden of proving debtors are not entitled to
relief should they file a motion to lift stay. Bans on legal action act as an
injunction that prohibit creditors to begin or continue further collection
efforts for a wide assortment of debts.
Virginia bankruptcy stops real estate foreclosures. With limited exception, all foreclosure actions are
prevented whether judicial, non-judicial, filed,
threatened or pending. All creditor actions for payment become null, without legal force or effect, and
creditors may not recommence legal action unless obtaining specific permission from the court after notice and
hearing. Debtors must receive written notice of all motions to lift the injunction and are provided with an
opportunity to be heard before the court rules on these motions.
Virginia Bankruptcy Exceptions
The exceptions to an automatic stay are provided by 11 U.S.C. 362. For example, utility bills are covered
by a special clause which allows for termination of service
after 20 days. Many other types of collection efforts in a Virginia bankruptcy are prohibited by the
automatic stay statute permanently, including the following: garnishment, phone calls, demand letters, and lawsuits for
collection.
Creditors who violate the injunction knowingly are subject to sanctions. The court retains
broad authority to prevent further violation and impose fines, civil sanctions,
and criminal sanctions against
creditors. Often creditors do not have actual notice when a case is filed, yet nevertheless
must comply. Virginia bankruptcy courts tend to be lenient on creditors who violate the
stay before actual notice is received. However, after a creditor receives
notice, Virginia bankruptcy courts quickly grow intolerant of violations and sanctions for knowing violations are
common.
The Code provides numerous options for discharge and reorganization of debts. The benefits and burdens upon
debtors varies, and may provide a significant improvement in financial condition. Because the law evolves daily
through legislative and judicial decisions, the assistance of qualified legal counsel is essential to gain the
maximum benefit allowed by law.
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