Automatic Stay Created When Filing Bankruptcy

The automatic stay is one of the most important aspects of the bankruptcy law. Once a petition for bankruptcy is filed by a debtor, the automatic stay is immediately in place. This means all collection activity must stop, and a creditor may be punished for ANY collection activity that occurs, even if they did not have notice of the bankruptcy. Under the stay debt collection includes:

• Starting an New Debt Collection Lawsuit
• Mortgage Foreclosures
• Repossession
• Debt Collection Lawsuits already in-progress
• Garnishment Actions
• Debt Collection Phone Calls
• ACH on any account

This feature of bankruptcy gives you a much-needed break from stressful and harassing phone calls. The automatic stay continues until the bankruptcy is completed, relief from the stay is granted to a particular creditor, or the debtor receives a discharge. Violations of the automatic stay can result in substantial penalties for creditors, including damages for emotional distress and punitive damages.