Automatic Stay
Automatic stays prevent creditors from suing a debtor once the debtor has filed for bankruptcy. Automatic stays also stop any cases currently pending against the debtor until the bankruptcy case has ended.
A creditor may petition the bankruptcy to lift the automatic stay for them if the creditor can convince the court that the automatic stay will damage their rights. However, the stay can only be modified or lifted 30 days after the bankruptcy petition has been filed.
Automatic stays remain in force for as long as the bankruptcy case is pending, which depends on which chapter the debtor is filing under. Automatic stays can last for about 6 months in Chapter 7, and up to 5yrs for Chapter 13.
If a prior bankruptcy case has been dismissed and the debtor refiles for bankruptcy, the automatic stay may be limited. In this case, how long the automatic stay lasts is subject to the bankruptcy judge’s discretion. If a debtor has filed for bankruptcy more than twice and both cases have been dismissed the automatic stay will only take affect with a court order.
In addition, automatic stays will not prevent every collection action. Actions to collect on certain debts like child or spousal support will not be stalled by filing for bankruptcy.
Any debtor with questions about automatic stays and their specific effect on the debtor’s case should consult a bankruptcy attorney in their state.
Additional Resources
- Chapter 7 Vs Chapter 13
- Recent Changes to Bankruptcy Law
- How to File Bankruptcy
- Bankruptcy Filing Fees
- The Automatic Stay
- The 341-Meeting
Bankruptcy Laws overview | Faqs on Bankruptcy | Bankruptcy Terms
