Automatic Stay

The filing of a bankruptcy petition will immediately trigger an automatic Stay that stops most debt-collection actions for a period of time. As long as the stay is in effect, creditors generally cannot file lawsuits against you, garnish your wages, or engage in other activities to collect on their loans.

The automatic stay can stops foreclosure proceedings.  For the stay to stop foreclosure proceedings, however, the bankruptcy petition must be filed before your mortgage company completes the foreclosure sale. Moreover, you could still lose your home if you fail to make mortgage payments that become due after you have filed for bankruptcy.

The granting of the say depends on how many bankruptcies you have filed within 1 year. Your "stay" may not be automatic if you have filed a previous bankruptcy within the prior year. Your bankruptcy attorney can advise you on how to file a motion for additional "stay" protection if it is not "automatic."

What the automatic say cannot do for you: 

Child support.  The automatic stay will not stop a lawsuit against you that attempts to establish paternity.  In addition, it will not stop a lawsuit that tries to establish, modify or collect child support payments.

Criminal proceedings.  If you are involved in a criminal proceeding that involves both a debt and criminal portion, the automatic stay will only stop the debt portion of the proceeding.  So, if you were convicted of petty theft and were ordered by a judge to make repayments and also conduct a certain number of hours of community service, the automatic stay will only stop the repayment portion of your sentence.  You will still be required to complete your community service hours.

Loans from your pension.  If you took a loan against your pension, the automatic stay will not prevent your wages from being garnished in order to repay the loan to your pension.

Some tax proceedings.  The automatic stay will not help you if the IRS wants to audit you or issue a tax deficiency against you.  Also, the automatic stay will not prevent the IRS from demanding that you file a tax return, or from issuing you a tax assessment or demanding payment for taxes that are owed.  However, if you are protected by the automatic stay, the IRS cannot issue a tax lien against your income or property.