If you are being harassed, garnished, foreclosed on, or repossessed
Take a breath. There is a federal law designed exactly for this moment.
The automatic stay is a court order that takes effect the instant your bankruptcy petition is filed with the clerk's office. It orders every creditor in the country to stop. Stop calling. Stop suing. Stop garnishing. Stop foreclosing. Stop repossessing.
They do not get a choice. They do not get to finish what they started. The law says stop, and if they do not stop, they can be held in contempt of federal court and ordered to pay you damages.
How it works: You file a bankruptcy petition. At that exact moment - not when the creditor finds out, not when a judge reviews it, but at the moment the clerk stamps it - the stay is in effect. It covers virtually all collection activity against you and your property.
What the automatic stay stops
- Collection calls and letters - Creditors and debt collectors must cease all contact
- Lawsuits - Pending lawsuits against you are frozen; new ones cannot be filed. If you are currently being sued for a debt or have been sued by a credit card company, the stay halts those cases immediately
- Wage garnishment - Your employer must stop withholding garnished wages
- Foreclosure - Scheduled foreclosure sales are halted
- Repossession - Creditors cannot take your car, equipment, or other property. Before filing, check whether you have a right to cure the default under state law
- Utility disconnection - Utilities cannot shut off service for at least 20 days
- Bank account levies - Creditors cannot freeze or drain your bank accounts
- Tax collection - The IRS and state tax agencies must pause collection efforts
- Eviction proceedings - Most eviction cases are paused (with some exceptions)
What happens when creditors violate it
A creditor who continues collection activity after your bankruptcy is filed is violating a federal court order. Under Section 362(k), individuals can recover:
- Actual damages - including emotional distress in many circuits
- Attorney fees and costs
- Punitive damages - in appropriate circumstances
Common violations: a car lender repossesses your vehicle after filing. A debt collector keeps calling - including zombie debt collectors trying to revive old debts. Your employer continues garnishing wages. A bank freezes your account.
Learn what to do if a creditor violates the stay →
Why Wells Fargo and Chase freeze accounts after you file (and when the stay requires release) →
Explore the automatic stay
What It Covers
Lawsuits, garnishments, foreclosures, repossessions, phone calls, utility shutoffs - organized by creditor type.
Read more →Violations and Damages
What counts as a violation, what to do about it, and the damages available under Section 362(k).
Read more →Exceptions
Criminal proceedings, domestic support, tax audits, certain evictions. The stay is powerful, but not absolute.
Read more →Repeat Filer Limits
BAPCPA's 2005 changes: the 30-day stay under 362(c)(3), the no-stay rule under 362(c)(4), and how to get protection restored.
Read more →Motion for Relief
When and why creditors ask the court to lift the stay, and how to oppose it.
Read more →How Long Does It Last?
Chapter 7 vs. Chapter 13 duration. What happens when a case is dismissed. When the stay ends.
Read more →The statute: 11 U.S.C. Section 362
Section 362(a): "Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title ... operates as a stay, applicable to all entities, of --"
The subsection then lists eight categories of prohibited activity, covering virtually every type of collection action a creditor can take.
The automatic stay has been part of the Bankruptcy Code since the Bankruptcy Reform Act of 1978. It was significantly modified by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), which added the repeat filer limitations under Sections 362(c)(3) and 362(c)(4).
The private right of action for willful violations under Section 362(k) - allowing individual debtors to recover actual damages, attorney fees, and punitive damages - remains one of the strongest enforcement mechanisms in bankruptcy law.
Frequently asked questions
Does the automatic stay apply to all creditors?
Yes. The stay applies to every creditor, whether they know about the filing or not. Once the petition is filed, the stay is in effect as a matter of law. A creditor who acts in ignorance of the filing may not face sanctions for a willful violation, but the action itself is still void or voidable.
Do I need to tell my creditors I filed?
The court sends formal notice to all creditors listed in your petition. However, if a creditor is actively pursuing you - calling, garnishing, about to foreclose - you or your attorney should notify them immediately. Providing the case number and filing date puts them on clear notice.
Can a creditor repossess my car after I file?
No. If you file bankruptcy before the creditor takes possession, they must stop. If they repossess after filing, they are violating the automatic stay and may be required to return the vehicle and pay damages. Even if repossession was in progress, the stay freezes it.
Does the automatic stay stop an eviction?
In most cases, yes - at least temporarily. However, there are exceptions. If your landlord already obtained a judgment for possession before you filed, the stay may not apply. See exceptions to the automatic stay for details.
What if I filed bankruptcy before and it was dismissed?
If your prior case was dismissed within the past year, the automatic stay in your new case lasts only 30 days under Section 362(c)(3). If two or more cases were dismissed in the past year, you get no automatic stay at all under Section 362(c)(4). In both situations, you can file a motion asking the court to extend or impose the stay. See repeat filer limits.
What is the automatic stay in bankruptcy?
The automatic stay is a federal injunction under 11 U.S.C. Section 362 that takes effect the instant a bankruptcy petition is filed. It immediately halts all creditor collection activity, including lawsuits, foreclosures, repossessions, wage garnishments, and collection calls. No court hearing or judge's order is required for it to take effect.
What does the automatic stay stop?
The automatic stay stops foreclosure sales, vehicle repossession, wage garnishment, bank account levies, debt collection lawsuits, collection phone calls and letters, utility disconnection for 20 days, and IRS or state tax collection actions. It applies to virtually all creditors from the moment the bankruptcy petition is filed with the court.
Does the automatic stay stop foreclosure?
The automatic stay stops foreclosure immediately upon filing. Even if a foreclosure sale is scheduled for the same day, filing the bankruptcy petition before the sale halts the process. In Chapter 13, debtors can cure mortgage arrears through a repayment plan while keeping the home. In Chapter 7, the stay delays but does not permanently prevent foreclosure.
Does the automatic stay stop wage garnishment?
The automatic stay stops wage garnishment immediately when the bankruptcy petition is filed. The debtor or attorney should notify the employer and the garnishing creditor of the filing. Any wages garnished after the petition date must be returned. The employer must stop withholding once notified, and continued garnishment is a willful stay violation.
How long does the automatic stay last?
For first-time filers, the automatic stay lasts the entire duration of the bankruptcy case until discharge, dismissal, or case closure. In Chapter 7, that is typically three to six months. In Chapter 13, the stay continues for the three-to-five-year plan period. Repeat filers face reduced protection under Sections 362(c)(3) and 362(c)(4).
What happens if a creditor violates the automatic stay?
Under 11 U.S.C. Section 362(k), an individual debtor injured by a willful stay violation can recover actual damages, costs, attorney fees, and in appropriate circumstances, punitive damages. Common violations include continuing collection calls after filing, repossessing a vehicle post-petition, or garnishing wages after the case number has been assigned.
Can a creditor get relief from the automatic stay?
A creditor can file a motion for relief from stay under 11 U.S.C. Section 362(d), asking the court to lift the stay for a specific debt or asset. Common grounds include lack of adequate protection of the creditor's interest, no equity in the property, and the property not being necessary for an effective reorganization. The court holds a hearing and decides.
Related Topics
Official Statute Text and Authority Sources
The automatic stay is codified at 11 U.S.C. Section 362 (Title 11, United States Code). The full statutory text is available from these authoritative sources:
- 11 U.S.C. Section 362 - Cornell Law Institute (LII) - Full text with annotations and cross-references
- 11 USC 362 - U.S. House Office of Law Revision Counsel - Official statutory text
- Bankruptcy Basics - USCourts.gov - Plain-language overview from the federal judiciary
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