Need a breathing spell from your creditors?

The protections of the automatic stay in bankruptcy cases are provided for by section 362(a) of the Bankruptcy Code. The automatic stay is an instrument of awesome breadth and power, which is obtained by almost every debtor that files a bankruptcy petition. This protection brings relief by operation of law the moment the bankruptcy petition is filed.

The basic purpose of the automatic stay is to protect the debtor and the debtor’s property. As stated in the House Report:

The automatic stay is one of the fundamental debtor protections provided by bankruptcy laws. It gives the debtor a breathing spell from his creditors. It stops all collections efforts, all harassment, and all foreclosure actions. It permits the debtor to attempt a repayment or reorganization, or simply to be relieved of the financial pressures that drove him into bankruptcy.

Generally, the stay lasts for the duration of the case. Almost all forms of civil legal actions are brought to an abrupt halt and stopped in their tracks by the automatic stay. This includes proceedings like attachments, garnishments and executions, most evictions, and some family-related court proceedings. Once the automatic stay goes into effect, no further steps may be taken against the debtor or the debtor’s property in the stayed proceedings without permission from the bankruptcy court.

Unless permitted by a statutory exception to the stay, creditors may not engage in any collection activity or any other acts to try and force the debtor to pay a claim that arose prior to filing bankruptcy. This prohibition encompasses all collection attempts by phone, mail, in person, or through third parties.

There are exceptions to the automatic stay such as criminal proceedings and actions concerning domestic support obligations.

Speak to an experienced bankruptcy attorney to determine if filing for bankruptcy is the right option for you.