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The Automatic Stay: What Are the Exceptions?

When your bankruptcy attorney files the petition on your behalf, an automatic stay goes into effect to prevent your creditors from contacting you, pursuing a civil lawsuit, or taking any other adverse actions against you. However, there are a few exceptions to the automatic stay. Certain actions will proceed regardless of your bankruptcy case. These include virtually all divorce-related proceedings, including child support collections actions, paternity lawsuits, alimony collections, and child custody arrangements.

Be sure to let your bankruptcy lawyer know if you have tax debt or a pension plan. The automatic stay will not prevent wage garnishment for the purpose of repaying a loan taken out against an ERISA-qualified pension. The automatic stay also does not prevent the IRS from performing a tax audit, issuing deficiency notices, or demanding payment.

Despite these exceptions, an automatic stay can help many debtors stop adverse actions against them. If you're struggling with debt and live near Aurora or Schaumburg, call the bankruptcy lawyers of Cutler & Associates, Ltd. at (847) 961-4572.

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