The automatic stay: the pause is only the starting point

A change in the rules of engagement

An automatic stay generally arises when a bankruptcy case is filed and restricts many collection actions. Its reach, exceptions, duration, and available relief need case-specific analysis. A creditor should not treat a familiar collection process as automatically permissible after receiving notice.

Map the activity before deciding

Make a list of pending calls, demands, litigation, enforcement, repossession, setoff proposals, and scheduled actions. Give that list and the bankruptcy notice to counsel. Record what has already happened and the exact dates; chronology can be important.

The useful operational task is to get a reliable picture of the account and route it to someone who can assess the stay. This article does not determine whether a particular action is prohibited or authorized.

Questions worth answering

• What debtor and property are covered in this case?
• Is an exception or a separate court order relevant?
• Does the planned action require relief from the bankruptcy court?