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Automatic Stay

The immediate, court-ordered halt to most collection activity that takes effect the moment a bankruptcy case is filed.

Informational only - this is not legal advice. These definitions explain general legal vocabulary in plain English. They are not advice about your situation, reading them creates no attorney-client relationship, and the law differs from state to state and changes over time. For advice you can rely on, speak to a lawyer licensed in your state.

What it means

The automatic stay is the part of bankruptcy that acts fastest. The moment a petition is filed, most collection activity against the debtor has to stop: collection calls, lawsuits, wage garnishment, repossession and foreclosure. It is automatic in the literal sense - no hearing and no separate order is needed - and creditors are bound by it whether or not they have been formally notified.

Its purpose is to freeze the position so that claims can be dealt with in one orderly process rather than by whichever creditor moves fastest.

It is not unconditional. Defined categories are excluded - certain family-support proceedings and various criminal matters among them - a creditor may ask the court to lift the stay as to specific property, and the protection can be shortened or unavailable where there have been recent prior filings.

Where this comes from

11 U.S.C. § 362(a) creates the stay; § 362(b) lists the exceptions and § 362(d) governs when a court may grant relief from it. This is federal law and applies nationally.

When people hire a lawyer for this

The stay is often the reason a filing is urgent - a scheduled foreclosure sale or garnishment is the deadline in practice. It is also where the exceptions matter most, because assuming a particular debt is covered when it falls into an exception is a costly mistake.

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Part of the LawyerLand plain-English legal glossary. Definitions are written from primary sources - statutes and court rules - and each entry states the authority it rests on, or says plainly when the doctrine is state law with no national rule.

If you cannot afford a lawyer, civil legal aid programmes provide free help with many of these problems: civil legal aid programmes by state.