The automatic stay is an order that’s put in place as soon as you file for bankruptcy. All collection efforts to collect money you owe (other than child support and alimony), including calls, letters, and other techniques, must come to an immediate halt. It stops almost anyone who is trying to collect from you.
A few things that a creditor cannot do once the stay is in place include:
(If you’d like to find out more about methods creditors can use before you file for bankruptcy, visit Nolo’s Debt Collectors, Collection Agencies & Debt Buyers topic page.)
In most cases, the automatic stay will protect you throughout your case. But not always. It’s common for a creditor to file a motion to lift the automatic stay (a motion to remove the stay order) if a foreclosure or a lawsuit is pending. If the court grants the request, the judge will withdraw the stay order and allow the creditor to continue with its collection efforts.
(Learn more in the article When a Creditor Tries to Lift (Remove) the Automatic Stay.)
Also, if you’ve filed more than one bankruptcy case within a year, you might not receive as much—or any—protection. Depending on a number of times you’ve filed during the previous year, the stay could be limited to 30 days (you filed one other matter) or might not apply at all (you filed two or more cases). If you find yourself with this problem and want the protection of the stay, you’ll have to file a motion asking the court to extend it or put it in place. The court will consider doing so if you explain why you filed your previous cases and demonstrate that you aren’t gaming the system by repeatedly filing for bankruptcy.
(For additional details, go to the Bankruptcy’s Automatic Stay topic page.)