How does the automatic stay work, to stop foreclosures, repossessions or other collection efforts from taking place?
Just by filing a bankruptcy petition, an “automatic stay” against all collection efforts is put in place. This is a powerful tool of bankruptcy, and one of the law’s primary protections for debtors. Most creditors have to stop all efforts to collect from a bankruptcy debtor. Creditors must stop making calls to the debtor, stop sending letters, stop all lawsuits to collect, etc. The automatic stay also stops foreclosures, repossessions or sales of property from going forward. If you don’t pay your house payments, however, the creditor will have the right to continue the foreclosure once the dust settles. Thus, the benefits of the automatic stay are often temporary when the creditor is a secured creditor. There are a number of exceptions to the automatic stay. For example, attempts to establish or collect alimony or support obligations are not stayed, nor are criminal suits or suits by governmental agencies to protect the public. Moreover, the automatic stay does not arise if you are fil
Just by filing a bankruptcy petition, an “automatic stay” against all collection efforts is put in place. This is a powerful tool of bankruptcy and one of the law’s primary protections for debtors. Most creditors have to stop all efforts to collect from you. Creditors must stop making calls to you, stop sending letters, stop all lawsuits to collect, etc. The automatic stay also stops foreclosures, repossessions or sales of property from going forward. If you don’t pay your house payments, however, the creditor will have the right to continue the foreclosure once the dust settles. Thus, the benefits of the automatic stay may be temporary when the creditor is a secured creditor. There are a number of exceptions to the automatic stay. For example, attempts to establish or collect alimony or support obligations are not stayed, nor are criminal suits or suits by governmental agencies to protect the public. See Supplement Sheet. If you file for bankruptcy within one year of having another ba
