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Law Office of Gordon Mosley
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What is the automatic stay in bankruptcy?

The automatic stay is an important protection during the bankruptcy process and those considering filing for bankruptcy should be familiar with how it works. The automatic stay goes into effect once the filing party has filed for bankruptcy protection and protects them from collection actions during the process.

During the bankruptcy process, creditors are prevented from pursuing collection actions against the filing party while the bankruptcy process is underway and until it is concluded. This is true of any bankruptcy including Chapter 7 bankruptcy, Chapter 13 bankruptcy and others. The automatic stay is an important protection to be familiar with because it stops a collection lawsuit that has been brought against the filing party by any creditor, collection agency, government entity or anyone else seeking money from the filing party.

The automatic stay may be able to help when the filing party is behind on home loan payments, rent payments, utility payments or other bills. In some circumstances, it can provide enough breathing room for the filing party to get caught up. In others, such as when the filing party is behind on mortgage payments, it may allow the filing party to include past due payments in a reorganization bankruptcy process to get current.

There are a variety of different legal resources available to protect consumers who are struggling with debt and looking for help. The automatic stay that is part of the bankruptcy process and can help provide some relief as struggling consumers look to enjoy overall debt relief through the bankruptcy process.

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Law Office of Gordon Mosley

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