An automatic stay is imposed after filing bankruptcy. It stops all collection efforts, lawsuits, harassment and foreclosure actions.

What purpose does an automatic stay in bankruptcy serve? Can the filer be benefited from this?

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Under 11 U.S.C. section 362, an “Automatic stay” comes into effect when a petition is filed under any chapter of the bankruptcy code, and no hearing is required before the automatic stay goes into effect.

An automatic stay immediately stops all collection efforts, lawsuits, seizure of property, all harassment and foreclosure actions. The scope of an automatic stay is very broad.
 


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