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Bankruptcy
The Automatic Stay in Bankruptcy
What Is the Automatic Stay?
When you file for bankruptcy, an "automatic stay" immediately goes into effect. This is a legal injunction that stops most collection actions against you.
What the Automatic Stay Stops
- Creditor calls and collection letters
- Lawsuits to collect debts
- Wage garnishment
- Foreclosure proceedings
- Repossession of property
- Utility disconnections (temporarily)
What the Automatic Stay Does NOT Stop
- Criminal proceedings
- Child support and alimony collection
- Certain tax proceedings
- Evictions in some circumstances
Lifting the Stay
Creditors can ask the court to "lift" the stay in certain circumstances—for example, if a secured creditor (like a mortgage lender) is not receiving payments. The court will hold a hearing to decide.
Frequently Asked Questions
What is the automatic stay?
The automatic stay is an injunction that takes effect immediately when you file bankruptcy. It stops most creditor collection actions, lawsuits, foreclosures, and wage garnishments.
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