Automatic Stay in Bend, OR
Federal Protection That Stops Creditors the Moment You File
When a bankruptcy petition is filed, federal law under 11 U.S.C. Section 362 immediately triggers an automatic stay. It is a court order that halts most creditor collection actions without a separate hearing. Wage garnishment stops. Foreclosure proceedings pause. Vehicle repossession can’t proceed. Collection calls must cease. This protection takes effect the moment the petition is filed, which is why timing your filing correctly can make the difference between keeping your home and losing it.
At Oregon Fresh Start, we view bankruptcy as a legal tool for resetting financial direction, not a personal failure. Over more than 43 years and 11,000 clients across Central Oregon, we’ve guided people through Chapter 7 and Chapter 13 filings. When filing isn’t the right move, we talk through alternatives honestly. If you’re facing active creditor pressure right now, call us at (541) 262-0040 for a free consultation.
What the Automatic Stay Actually Stops
The stay’s reach is broad and immediate. Once your petition is filed and creditors receive notice, any further collection action is prohibited under federal law. Here’s what that protection covers:
- Wage garnishment: Your employer must stop withholding wages as soon as they receive notice of your filing. If a garnishment is scheduled within days, we can often file same-day or next-day to stop it in time.
- Foreclosure proceedings and sales: A scheduled foreclosure sale is paused upon filing, giving you time to evaluate your options rather than watching a deadline pass.
- Vehicle repossession: Repossession must stop immediately, even if it was planned for the same day as your filing.
- Collection lawsuits: Active civil suits are paused, and new ones can’t be filed while your case is pending.
- Creditor calls and letters: Once you retain our firm, you can refer all creditor contact directly to our office. We handle all communication on your behalf from that point forward.
The stay doesn’t cover every obligation. Child support, alimony, certain criminal fines, and most IRS audit proceedings continue regardless of a bankruptcy filing. We can walk you through exactly what applies to your situation during your consultation.
When Creditors Violate the Stay
Some creditors continue collection activity after a bankruptcy is filed, whether by mistake or deliberately. Federal law takes stay violations seriously. A creditor who willfully violates the automatic stay may be liable for actual damages, attorney fees, and in some cases, punitive damages.
We actively pursue these violations on behalf of our clients. When a lender or collection agency crosses the line, we work to hold them legally accountable and may negotiate settlements related to the breach. In some situations, we handle this enforcement on a contingency basis, meaning no extra cost to you. If you receive any calls, letters, or other contact from a creditor after your filing, document them and report everything to us immediately so we can review the situation and respond.
Chapter 7 vs. Chapter 13: How the Stay Works Differently
Both Chapter 7 and Chapter 13 activate the automatic stay the moment you file. What happens after that depends significantly on which chapter you choose. The difference matters most if you’re trying to protect your home.
Chapter 7 and the Stay
Chapter 7 halts foreclosure temporarily, but it doesn’t include a repayment plan to cure mortgage arrears. If a lender can show there’s no path to catching up on payments, they may file a motion to lift the automatic stay and ask the court to allow foreclosure to resume. Chapter 7 typically reaches discharge in about 120 days in Oregon, making it the faster path for those focused on eliminating unsecured debt rather than saving a home.
Chapter 13 and the Stay
Chapter 13 pairs the stay with a three-to-five-year repayment plan that can include curing past-due mortgage payments over time. For homeowners behind on their mortgage, this can be the more effective chapter. It gives you a structured path to catch up on arrears while keeping your property. If a creditor files a motion to lift the stay during a Chapter 13 case, that motion requires a prompt response, and we handle that process for you.
Choosing between chapters isn’t a decision to make in isolation. We review your income, assets, debts, and long-term goals before recommending a direction, and no two plans we build look the same.
Why Bend Residents Work with Oregon Fresh Start
More than 43 years of bankruptcy law practice and 11,000 individuals served across Central and Eastern Oregon gives our clients a level of context shaped by long experience. We’ve worked through economic downturns, housing crises, and shifts in federal law, and that history shapes how we prepare each case. We focus solely on bankruptcy law, which keeps our processes consistent and our team deeply familiar with what Oregon courts expect. Our pricing is transparent: we don’t bill for extra phone calls or emails, and every client knows the full cost of their case before making any commitments. The initial consultation is free.
How We Work with Clients
You work directly with an attorney from the first consultation through filing and any court appearances. Communication doesn’t pass through layers of staff. For clients in Bend, Redmond, Hermiston, and surrounding communities, remote consultations and electronic document handling mean meetings, signatures, and document sharing can often be completed from home. Every case also includes our credit rebuilding program: many clients reach a credit score of 720 or higher within 12 to 18 months of their discharge. We explain the practical steps, clarify how future lenders view a completed case, and provide guidance that extends well past your final court date.
Start with a Free Consultation
If you’re in Bend or anywhere in Central Oregon and facing garnishment, foreclosure, or persistent creditor pressure, the automatic stay can put an immediate stop to it. The sooner you file, the sooner that protection takes effect. We answer calls and emails promptly on evenings and weekends and can often file within 24 hours when the situation demands it.
Call (541) 262-0040 to speak with Oregon Fresh Start today and find out what a bankruptcy filing can do for your situation.
Have Questions?
We Have Answers!
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WHAT DOES IT MEAN WHEN A CREDITOR WANTS ME TO REAFFIRM MY LOAN WITH THEM? IS THAT DIFFERENT FROM REDEMPTION?Secured creditors (those creditors who have collateral for their loans, such as a car or boat) will want you to reaffirm the loan. When you reaffirm the loan, you re-obligate yourself to all of the loan terms just as if you were getting a new loan from the creditor. Although this may sound harmless, it has serious consequences. If you reaffirm and then later default on the loan, you are personally liable to pay the balance and you will have no protection on that debt from the bankruptcy. One of the major changes made to bankruptcy law in 2005 is that a creditor can repossess the collateral if you do not reaffirm. This change does not apply to real estate debt. Your reaffirmation agreement is subject to court approval in some circumstances. If your income is less than your monthly expenses, you may be required to participate in a telephone hearing with the court where you will be required to explain to a bankruptcy judge why the reaffirmation is in your best interest and how you intend to make the payment. More often than not, when you file bankruptcy, you owe more on the collateral securing the loan than it is worth. If your loan is more than 2 1/2 years old, under a process called REDEMPTION, bankruptcy law allows you to reduce the amount owing on the debt to the value of the collateral if you can pay it all at once. Many debtors can find a source of family financing or, perhaps, borrow from a 401K account, etc. and come up with the full value. There is also a company on the internet that specializes in redemption funding for cars. Talk with OREGON FRESH START about this for more information. WOULDN'T IT BE BETTER TO SETTLE MY DEBTS THROUGH A DEBT CONSOLIDATION PLAN? Although there may be a few reputable credit counseling services out there, most will not and cannot give you what they promise. Usually, they promise they can settle your debts for 50 cents on the dollar and that when you get done, you will have great credit. The facts are that (1) most people do not complete the "plans" because they usually do not work, and if you do complete the plan, (2) your credit is trashed. Creditors report to credit bureaus exactly what happened. If you get hooked on a 50% plan, your credit report will show that you did not pay all of the debt and that the unpaid balance was charged off. Most creditors do not waive interest or late fees. In addition, most credit counseling programs will charge you a fee (a portion of each payment) and they often do not send your money to the creditors for several months. This gives them an interest-free loan working with your money. Most debtors would be better off filing a Chapter 7 or Chapter 13 bankruptcy which can force the creditors to accept your terms of repayment. In addition, and this is a big one, the amount that was charged off by the creditor will likely be reported to the IRS with a 1099 tax form and you will be required to pay income taxes on the charged-off amount which will be a very unpleasant surprise for you when you file your tax returns for that year. CAN STUDENT LOANS BE DISCHARGED? Yes, but it is not easy. It will also, probably, be expensive. Once upon a time, federally guaranteed student loans were dischargeable if the loan was more than 7 years old. In 1998, the federal government changed all that. Now, federally guaranteed student loans cannot be discharged unless you can prove that being required to repay the loan will cause an undue hardship - not just a hardship, but an "undue" hardship. To have an opportunity to prove your case, you will be required to sue the federal government in bankruptcy court through an adversary proceeding. You will be required to prove all of the following: repayment of the loan would prevent you from maintaining a minimal standard of living your financial circumstances are not likely to change in the foreseeable future you made a good faith effort to repay the loan before you became unable to pay Frequently, the federal government will try to show that you could get a reduced payment plan by going through a consolidation program that will stretch out your payments for 20 years or more based upon an "ability to pay." In short, it is possible to discharge a student loan, but the government has made it very difficult. Also, remember that the government has a raft of lawyers to defend the federal government in the lawsuit who are paid for by your taxes. On the other hand, you will be required to pay for your attorney.
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ARE LOANS OWING TO RELATIVES GIVEN SPECIAL TREATMENT IN BANKRUPTCY?It is not uncommon for you to owe money to a relative. As discussed in other answers to questions, you must list every debt. This includes debts you owe to your family members. The bankruptcy court looks closely at loan transactions between family members. As we all know, if we owe money to several creditors and one of them is a family member, we will probably be inclined to pay the family member first. In a bankruptcy context, this often means that family members have been paid while the other creditors have not been paid. One of the main ideas behind filing bankruptcy is that all creditors share your misfortune equally. One of the questions asked in the bankruptcy petition is whether you have repaid any loans from relatives within the past year. If you have, you are required to disclose the amount. If the amount is large enough, the bankruptcy trustee has the power to get the money back from the relative and spread it out equally among all the creditors. While there is no set rule as to what amount is "large enough," if the amount were $2,000 or more, that would definitely be "large enough." There are other factors that go into the trustee's decision, including whether you have any other assets which exceed the exemption amounts and how likely it is the trustee can obtain a return of the money from the relative. A relative who has already spent the money and whose only source of income is Social Security is not likely to be a target for the trustee. If you have a loan from a relative and are considering filing bankruptcy, stop paying on the loan until you consult with OREGON FRESH START.
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CAN I TRANSFER PROPERTY TO A FRIEND OR RELATIVE TO PROTECT IT FROM BANKRUPTCY?If you transfer any of your property to a relative, even by selling it, within 1 year of filing for bankruptcy, the bankruptcy trustee can reverse that transfer if it was transferred for less than the fair market value of the property. For example, if you gave Uncle Joe your car 30 days prior to filing bankruptcy because you did not want it to show as an asset in your bankruptcy, the trustee has the power to sue Uncle Joe and get the car back. Unfortunately, some people engage in such an activity before consulting with an attorney. It is also not advisable if you have already made the transfer to attempt to transfer it back without first obtaining expert legal advice.
