Understanding automatic stays during business bankruptcy

If you are drowning in large amounts of business debt in Massachusetts, you may not be able to climb out of the hole without taking drastic action. Filing for  Chapter 11 bankruptcy protection may be a wise move to help you to break free from your debt. A major benefit of filing for bankruptcy is that you receive a nationwide and immediate injunction against every collection effort made against you, known as an automatic stay. However, there are some exceptions to automatic stays.

An automatic stay can protect you in a few important ways. First, it prevents people’s attempts to harass, threaten or sue you in an effort to collect debts from you. Second, it stops garnishment proceedings and lawsuits in their tracks. Finally, it prevents real estate property seizures, repossessions and foreclosures.

However, an automatic stay does not put a halt to the continuation or commencement of a lawsuit involving child support, a custody battle, paternity or the modification of a support obligation. Likewise, automatic stays do not prevent tax assessments or audits, although they do protect bankruptcy filers from tax liens. Furthermore, an automatic stay will not prevent a criminal prosecution from taking place. Still, depending on your situation, an automatic stay may give you the relief you desperately need if debt is destroying your quality of life as a business owner.

With 100 years of legal service under our belts, we understand the fine points of bankruptcy and automatic stays. Since 1918, the attorneys of Seder & Chandler have excelled at facing complicated and fast-moving legal issues in Massachusetts, from complex corporate law, commercial real estate law, estate planning, to acting as counsel for law matters, business and personal. Contact us today to learn how our combination of traditional commitments and adaptivity has given us a legacy of 100 years.