What is the automatic stay in bankruptcy?
The moment the BK petition is filed the Automatic Stay is created which is essentially a freeze on any collection attempts, no billing statements, no phone calls, no nothing. If a creditor willfully violates the automatic Stay they can be held liable for damages. The BK court will send the BK notice to all of your creditors, and they will be ordered to stop collecting, etc. If you have special creditors likely to act (like a foreclosure sale about to occur) you will want to immediately notify the trustee and beneficiary and loan servicer that BK has been filed, and give them the case number. That should halt the sale, but you can always go down to the Courthouse where the sale is to be held just to be safe. Once a property is sold it can be tough to set-aside the foreclosure sale especially if there was a bona fide purchaser for value. So, if a Bankruptcy petition is filed on let’s say, Thursday, and the creditor gets notice of it and they come the next day to try and pick up the vehic
