The Automatic Stay in Bankruptcy

When an individual or business files for bankruptcy, the "automatic stay" goes into effect. The automatic stay prohibits creditors from initiating or continuing debt collection actions against a debtor such as wage garnishment, sheriff's sales, tax liens, eviction, utility disconnections, and foreclosure. The creditor may not contact the debtor in any manner about the debt. Any property seized by creditors just before the bankruptcy filing must be returned to the debtor. This gives the debtor "breathing room" while the bankruptcy case is being processed. Read more