How the Automatic Stay Protects YouUpon the filing of a bankruptcy petition the court orders an “Automatic Stay”. This means that creditors are barred from continuing any collection activity, including repossessing assets, and any court proceedings are stopped. You can use the Automatic Stay to stop creditor action that is an immediate threat to you.
The Automatic Stay does not apply to:
- An eviction proceeding where the Landlord has recovered judgment and there is no right to cure;
- An eviction proceeding based upon endangerment of the property or illegal drug use
What the Automatic Stay Does
The Automatic Stay makes it a violation of the Bankruptcy Court's Order to conduct almost all collection activity. This means that the Automatic Stay can:
- Stop lawsuits from continuing and get them dismissed.
- Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
- Stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments.
- Stop wage garnishment
- Stop debt collection harassment
- Restore or prevent termination of utility service.
The Automatic Stay is an important protection that you can take advantage of when you file a Bankruptcy case.