The Automatic Stay: What is it and What Can it Do for You?

The automatic stay is one of the most powerful weapons in a bankruptcy arsenal to protect a debtor from his or her creditors. It’s impact is immediate upon the filing of the bankruptcy petition with the court, and its purpose is to provide instant relief from the stressors of creditor collections, harassment, lawsuits, wage garnishments, bank levy’s, liens etc. Once a bankruptcy case is filed, creditors are put on notice and advised that all collection efforts against the debtor are stayed during the pendency of the bankruptcy filing. Provided a discharge is entered in the case and the creditors claim is one that is eligible to be discharged in a bankruptcy proceeding, the debt will be permanently eliminated.

Certain actions are not “stayed” upon the filing of a bankruptcy, meaning they can proceed along their normal course despite the fact that a bankruptcy has been filed. They include: commencement or continuation of criminal proceedings against a debtor, a civil proceeding to determine paternity, or for the establishment or modification of a domestic support obligation. Proceedings related to child custody or visitation, or for the dissolution of marriage (except to the extent the dissolution proceeding seeks to determine a division of property of the marriage between the spouses). The automatic stay also does not stay actions regarding domestic violence or actions for the collection of a domestic support obligation (ie. generally child and/or spousal support).

If you are being harassed or sued by creditors, or if a judgment has already been entered against you; If your wages are being garnished, your bank levied, or if a creditor is about to place a lien against your property, the automatic stay is a fundamental tool that can be used to stop the chaos, and provide you and your family with the breathing room you need to regroup.