The Automatic Stay

A Big “Stop Sign” to the Creditors

The AUTOMATIC STAY is probably the most important feature of Chapter 7 Bankruptcy, separate and apart from actually receiving a DISCHARGE of debts. The commencement of a bankruptcy case (filing a PETITION) imposes an immediate and automatic restraining order upon all creditors, regardless of the bankruptcy Chapter that is chosen.

The source of this law is Section 362(a) of the Bankruptcy Code, which sets forth a list of the different types of actions against a debtor which are stopped (automatically stayed) by commencement of the bankruptcy case.

The AUTOMATIC STAY stops phone calls from bill collectors, the commencement of lawsuits against the debtor for the collection of money, enforcement of judgments, collection letters, demands for payment and other types of collection actions by creditors.

JEFF’S TIP: The Stay stops foreclosures and repossessions. Perhaps even more powerful is the fact that the automatic stay stops foreclosure and repossession. So this is an extremely powerful component of the bankruptcy laws and any debtor who is faced with the imminent repossession of a vehicle or the imminent foreclosure of real property will often resort to Chapter 7 if for no other reason than to gain time to try and resolve the debt problem and come up with a method of curing a default. Jeff Wishman is a Los Angeles bankruptcy attorney specialist with more than 30 years of experience.

If you want to CONTACT US directly, fill in the form immediately below to send us a private email. Often additional information about your situation is required to provide the best advice possible. For that reason, we request permission to contact you by telephone regarding this inquiry. If you include your phone number below, we will call you as necessary. Thank you.

Your Name (required)

Your Email (required)

Your Phone


Your Message

Leave a Reply

Your email address will not be published. Required fields are marked *