Automatic Stay in Bankruptcy – Stopping Creditors

Get Legal Help Today

 Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

UPDATED: Jun 19, 2018

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

The automatic stay is a rule that prevents any creditor from doing anything at all to enforce a claim against a debtor during the bankruptcy case. The granting of the stay depends on how many bankruptcies a person has filed within 1 year. A stay may not be automatic if the debtor has filed a previous bankruptcy within the prior year. A bankruptcy attorney can advise you on how to file a motion for additional stay protection if it is not automatic.

Creditor Violations of a Bankruptcy Automatic Stay

Some examples of actions by a creditor that would violate the stay are as follows: Filing a new lawsuit, or continuing to press a lawsuit that had already been filed; Sending dunning letters or making phone calls in an attempt to collect a debt; Filing a financing statement to perfect a security interest; Refusing to issue a transcript of your schooling; Suspending your driver’s license.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption

Exceptions to an Automatic Stay

There are exceptions to the automatic stay protection. These exceptions include: Criminal prosecution, paternity proceedings, litigation to collect child support or alimony, repaying a loan from certain types of pensions, and IRS audits are not stopped. With residential real estate leases, landlords seeking to evict tenants are free to complete evictions if the landlord already has a judgment of possession. Your landlord can also file for eviction after the bankruptcy is filed based on endangerment of property or use of illegal substances on the leased premises. Moreover, the automatic stay doesn’t stop or postpone actions to suspend driver’s licenses and revoke professional licenses related to a prosecution by a governmental unit, like your state’s attorney general office. Consult with a bankruptcy attorney to determine which exceptions may or may not apply to your situation.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption