Bankruptcy affects entities large and small. While individuals filing for bankruptcy is far more common, major cities around the state of Illinois have had to cut essential services to pay for pensions and other vital services.
Individuals filing for bankruptcy have various protections when the court approves the motion. Debtors have the power of the automatic stay once they file for bankruptcy, which automatically halts all debt collection proceedings. This includes all lawsuits filed by the creditor. It provides the debtor with some breathing room to get his or her financial affairs in order. However, there may be situations where you need to file for an extension on the automatic stay, so it lasts longer.
Multiple bankruptcy filings
Some people need to file for bankruptcy multiple times in a relatively short time. This is more likely to occur when a person files for Chapter 13 bankruptcy and a year later, she or he has to file again. For the second filing, the person will generally only have an automatic stay that lasts for 30 days. In this instance, the debtor’s attorney must file for an extension so that all lawsuits and court proceedings receive the stay for a longer period.
The best course of action for this is for the attorney to pursue an extension as soon as possible. It is a good idea to file for the extension the same day as filing the new petition. This increases the likelihood of a judge seeing the petition for an extension within the 30 days and approving it. The motion for an extension must come with an affidavit, which the debtor needs to sign. It is a complicated process, but it is an essential one if you worry about creditors continuing to file lawsuits. Generally, you should talk to your attorney so that you understand how long your automatic stay lasts.