Legal Question in Business Law in New York

Re: violation of stay

If the debtor is protected under the automatic stay provided in the Bankruptcy act you may not serve the debtor and you may not complete the lien. If you violate the stay, the penalty will be up to the judge. Accidental violations, when you haven't had notice, generally aren't punished, although the improper actions generally are treated as void. Knowing violations can lead to economic penalties.

Re: violation of stay

HIRE A LAWYER WHO HANDLES CREDITORS' RIGHTS MATTERS. YOU'RE GOING TO NEED ONE.

Once a creditor has notice that a bankruptcy case has been filed, that creditor may not contact that debtor, or proceed in any way, shape or form against that debtor, without the court's express permission. If a bankruptcy case is filed and the creditor proceeds against the debtor before creditor receives notice of the case, the creditor must stop all action when notice is received.

If a debt is for purchase money, the bankruptcy courts been known to often lift the stay as to that creditor on petition. If the creditor, though, takes matters into his or her own hands and contacts the debtor directly without going through the court, the court's level of sympathy for the creditor's loss goes WAY down.

The stay is in effect from the moment the debtor files, regardless of when, or even whether, the creditor is notified. If the creditor is notified and then does ANYTHING to contact the debtor (filing a suit, collections calls, collections letters, you name it), the bankruptcy court judge will generally have little, if any, sympathy. Penalties vary, but are generally pretty tough.

If the debtor filed a Chapter 13, the creditor stands to receive payment over time from the Trustee of the bankrupt's estate. The payment may or may not be equal to the amount owed; that depends on the approved Plan (on which creditors get to vote).

Good luck.

THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN US. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.