Understanding the Concept of Stay of Proceedings
Stay of Proceedings is a legal term that often surfaces when an individual or a business is dealing with financial difficulties. But what is a Stay of Proceedings? In simple terms, it’s a legal mechanism that pauses all actions from creditors for a certain period. This article will delve into the details of what a Stay of Proceedings is, when it applies, and the instances when it doesn’t.
A Closer Look at Stay of Proceedings
When a Stay of Proceedings is activated, all actions taken by creditors for the recovery of a claim that can be proved in bankruptcy are halted. This means that all actions related to debt collection are momentarily frozen. This legal tool is initiated when an assignment in bankruptcy or a consumer proposal is submitted. This action is governed by section 69 of the Bankruptcy and Insolvency Act.
A Licensed Insolvency Trustee, such as Steve Welker and Company, is the only entity that can assist you in obtaining this legal protection.
A Stay of Proceedings serves two main functions:
- It prevents creditors from taking legal action against you.
- It halts any garnishments on your wages or bank account.
The Exceptions to Stay of Proceedings
While a Stay of Proceedings provides a temporary respite from creditor actions, there are certain circumstances where it may not apply:
- If the debtor submits a second consumer proposal within a six-month period following their first consumer proposal.
- In situations where the debtor’s assets secure the creditors (for instance, Mortgage Companies and Car Financing Companies).
- If the court determines that the stay may cause significant prejudice to an individual.
- When the Trustee or Proposal Administrator receives their discharge.
Summing Up
If you find yourself in a situation where creditors are relentlessly pursuing you, and you need to halt their actions to prevent wage or bank account garnishment, a Stay of Proceedings may be your best option. However, navigating these waters can be challenging, and it’s advisable to consult with a professional.
Consultations are available for free, and a thorough review of your situation can be conducted to explain your options. You can quickly get in touch using the contact form below. Prompt responses and detailed explanations are a guarantee.
Now that we’ve covered the basics of What is a Stay of Proceedings? – its definition, implementation, and exceptions – it’s essential to delve deeper into its intricacies and implications. And that’s precisely what the next sections will address.
