In A Chapter 11 Case In Kansas City, What Is Affected By The Automatic Stay?

Overland Park Business Bankruptcy Attorney

The “automatic stay” is one of the basic protections provided to debtors in a Chapter 11 business or personal case.  It gives the debtor a much-needed breathing spell from creditors by pretty much stopping all collection activity, litigation, or contact from creditors of any kind.

In a Chapter 11 case (personal or business) filed in the Kansas City area (in either state), an automatic stay will immediately come into effect and will do the following:  (1) stop the initiation or continuation of any legal, administrative, or other proceeding against the debtor that arose before the commencement of the case; (2) stop the enforcement of any judgment obtained before the commencement of the case; (3) stop any act to obtain possession or control of property of the estate; (4) stop any attempt to perfect or create any lien against property of the estate, even postpetition liens; (5) stop the setoff of any debt against the debtor.  The automatic stay applies to all creditors, even the IRS.

The filing of a Chapter 11 bankruptcy case can be a very powerful tool to assist in a reorganization.  It has articles and provisions that other chapters of the Bankruptcy Code do not have.  If you have questions about Chapter 11 cases, please give us a call.

Read More:  Involuntary Bankruptcy Cases