In U.S. bankruptcy law, the “automatic stay” is an automatic court order that goes into effect as soon as a bankruptcy case is filed. It temporarily stops most collection actions against the debtor and the debtor’s property while the bankruptcy proceeds. The relevant rule is found in the U.S. Bankruptcy Code, typically
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What “bankruptcy code automatic stay” means
In U.S. bankruptcy law, the “automatic stay” is an automatic court order that goes into effect as soon as a bankruptcy case is filed. It temporarily stops most collection actions against the debtor and the debtor’s property while the bankruptcy proceeds. The relevant rule is found in the U.S. Bankruptcy Code, typically 11 U.S.C. § 362.
What the stay generally stops
The automatic stay usually halts actions such as: lawsuits and other legal proceedings against the debtor; wage garnishments and many collection efforts; most creditor attempts to repossess or foreclose; and certain attempts to collect debts outside the bankruptcy process. Creditors generally must seek permission from the bankruptcy court to continue certain actions.
Common exceptions and practical notes
The stay is not absolute. There are exceptions (for example, certain actions involving specific types of debts or property, and situations where the stay may be limited or lifted). Also, if a case is dismissed and refiled, the automatic stay may be reduced or not fully apply depending on timing and prior filings. If you’re dealing with a real case, consult a qualified bankruptcy attorney or legal aid for advice tailored to your situation.
