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What is the automatic stay during bankruptcy?

There are a variety of different ways that personal bankruptcy may be able to provide important protections to those burdened by overwhelming debt. One of those protections is the automatic stay that goes into effect once the filing party files for bankruptcy protection. It is helpful for bankruptcy filers to be familiar with the protections of the automatic stay.


The automatic stay applies to creditors, collection agencies, government agencies seeking money and anyone seeking money from the filer. The automatic stay halts all collection actions by any of these entities during the ongoing bankruptcy process. This can help prevent creditor collection calls and other collection actions during the bankruptcy process.

The automatic stay can help stop wage garnishment which can be a significant stresser for filing parties. The automatic stay can also help prevent utilities from being disconnected for at least 20 days. Additionally, the automatic stay can help halt foreclosure and eviction proceedings in some circumstances. It can also stop government agencies from seeking to recover overpayment of public benefits.

The two most common forms of personal bankruptcy protection are known as Chapter 7 and Chapter 13. Each has its own requirements, advantages and disadvantages. The automatic stay applies to all bankruptcy types and can provide relief for the filing party during their personal bankruptcy process as they work out their repayment plan or liquidation process. Personal bankruptcy can provide a fresh financial start along with a variety of other different protections, including the automatic stay, that those struggling with debt concerns should be aware of.

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