Generally speaking, the automatic stay stops foreclosures, repossessions, lawsuits, wage garnishments, and tax levies. It does not stop criminal proceedings or legal actions against you for support (such as child support).

Automatic stay:  Under bankruptcy law, an automatic stay is an automatic injunction that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy.

The filing of a bankruptcy petition triggers an “automatic stay”  that brings to a halt any type of creditor action.  That means that collection companies can no longer contact you, pending lawsuits are stayed, and pending bank levies are stayed.  The idea is that the stay gives you a chance to get a discharge in a chapter 7 case or get a plan confirmed in a chapter 13 case.  If your car was repossessed the car company has to return the car.  If your bank account was levied, the amounts taken will likely be turned over if the bankruptcy is timely filed.   For a foreclosure, the foreclosure sale will be taken off calendar.   For tax levies, the taxing authority will suspend the levy.

The stay is in existence until the debtor gets a discharge or the case is closed.   The bankruptcy code however, provides a mechanism for relief for a secured creditor who is not receiving payments on their collateral.   For instance, if you are a homeowner and you intend to keep your residence you have to continue making your mortgage payments.  If you do not, the mortgage company will have grounds to ask the court to grant “relief from stay” to allow them to foreclose on their collateral.   That means that if the court grants relief from say, the mortgage company could start or continue the foreclosure process.

Each situation is unique.  For a personalized review of your situation, call (925) 472-8000.