Legal Question in Bankruptcy in Virginia

Automatic Stay Bankruptcy

I filed for a Chapter 7 bankruptcy. One of my creditors is refusing to co-operate with the �automatic stay�. She states that she does not have to abide by the stay since she has a UCC -1 filed with the state. Is this true? I thought she had to wait until the court date to ask for relief from the stay? According to language of the contract, she is entitled to my ENITRE paycheck until the debt is paid. This has had a paralyzing effect on my personal finances. I obviously did not anticipate a market crash when I signed over my rights to my future commissions to repay the debt. The creditor is a commission advance company. As of now, my broker is holding my checks in escrow until the court date or a letter from an attorney stating how the monies should be disbursed. I will be forced out of business, since I cannot pay for my association dues, tools of the trade, and my business vehicle without the funds from my commission checks that are being held. Not to mention, I have two small children to provide for and I am the head of the house hold. Any advice is greatly appreciated. Note: I borrowed against a deal in which my client lied about his ability to purchase. He even went so far as to create false documents.


Asked on 10/21/08, 4:13 pm

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: Automatic Stay Bankruptcy

While the discharge does not prevent exercise of rights under a security agreement, the automatic stay does. However, you cannot use "cash collateral," which may or may not include the funds they are talking about. If you don't have a bankruptcy lawyer who can address this for you, we would be glad to go over this with you.

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Answered on 10/21/08, 4:29 pm


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