Automatic Stay in Bankruptcy: Your Rights & Protection

Understanding your right to an automatic stay with bankruptcy is important because this is one of the most critical components of the bankruptcy process. When the judge issues the automatic stay, you will have certain rights that cannot be violated by your creditors. Your creditors cannot file any lawsuits against you. If you were in the middle of any lawsuits with creditors, those lawsuits will have to be ended as well.

The process

Once you are in a stay position, creditors cannot place any collection calls to you either. They have to cease all communication and all attempts to collect the outstanding debts from you. Your creditors cannot repossess any property or conduct any foreclosure sales. During this time, only the court can decide what happens to your property, with the help of the bankruptcy trustee. Also, you cannot be subject to any wage garnishment, unless it is authorized by the court.

Once the automatic stay is issued by the court, it can not be lifted unless the court decides that it should be lifted. The automatic stay will remain in effect until your debt is discharged, or until the property in question is removed from your estate.